By Shreyashi Sanyal

UK stocks fell on Wednesday after data showed the economy contracted in March at a pace never seen before as the coronavirus crisis escalated, while analysts warned of more pain ahead.

The blue-chip FTSE 100 shed 1.5%, snapping a five-day winning streak and wiping out most of the gains it made this month on hopes that an easing in restrictions would revive business activity.

Britain's economy shrank by a record 5.8% in March, while first-quarter GDP contracted by 2%, with figures for April likely to show an even bigger fall in economic output.

The Bank of England has predicted the biggest economic slump in 300 years.

"Second quarter figures that cover a much longer period of lockdown will obviously be far worse," said Hugh Gimber, global market strategist at J.P. Morgan Asset Management.

"While economic activity should improve from the second half of this year, it still appears that a rebound is likely to be very gradual."

The mid-cap FTSE 250 also shed 1.8%, with travel stocks <.FTNMX5750> plummeting again after a warning from European travel company TUI about thousands of job cuts to ride out a virtual halt in global travel.

The retail index <.FTNMX5370> dipped 1.4% after surveys showed British retail spending plunged by nearly a fifth and a broader measure of consumer spending fell by more than a third in April.

"It's now very hard to imagine a rapid 'V-shape' recovery, and we don't expect a return to pre-virus levels of activity until 2022 at the earliest," said James Smith, developed markets economist at ING.

"The risk now is that a wider proportion of firms are beginning to make more permanent changes to their business models, now the potential longevity of the crisis is becoming clearer."

After rallying in April on a raft of global stimulus, investor sentiment has soured this month on the double whammy from fears of a second wave of COVID-19 cases and rising U.S.-China tensions.

Britain's death toll from the respiratory disease now exceeds 40,000 and is by far the worst yet reported in Europe, an ominous sign as the government starts to reopen an economy crippled by the lockdown measures.

In the latest sign of the corporate hit from the pandemic, Aston Martin slumped 16% to the bottom of the FTSE 250 after posting a first-quarter pretax loss as sales dropped by nearly a third.

Oil and gas producer Premier Oil rose 2.6% after saying it expects to be free cash flow neutral despite slumping prices due to its hedging programme.

Stock Spirits jumped 17.5% after posting a jump in first-half earnings as consumers stocked up on liquor ahead of tax hikes in its biggest markets, Poland and Czech Republic.

(Reporting by Shreyashi Sanyal, Devik Jain and Sagarika Jaisinghani in Bengaluru; Editing by Anil D'Silva and Alison Williams)