UK economy limps out of recession

UK economy limps out of recession – by a whisker

26 01 2010 United Kingdom

In the final quarter of last year the UK economy grew by 0.1 per cent and finally came out of recession, according to figures released by the Office for National Statistics

The Gross Domestic Product has contracted for six consecutive quarters since April 2008, the longest recession since figures were first recorded in 1955. The UK economy declined by a total of 6 per cent since the recession took hold.

The UK’s growth out of recession had been overtaken by the other major economies. Germany and France emerged from recession last year. Japan and the US also reached positions of growth last summer, leaving the UK as the last major economy still in recession.

The actual level of growth recorded by ONS in the quarter to December 2009 was a lot weaker than 0.4 per cent forecast by economists.

The weak level of GDP growth had an impact on the value of the pound, which fell against both the dollar and the euro on the money markets. Sterling tumbled almost a full cent against the dollar.

Last week UK unemployment was reported to have fallen for the first time in 18 months, but the VAT rate was increased from 1 January and real recovery is still a way off.

The Chancellor claimed that the country is now on a path to recovery, but he refused to rule out a double dip before the economy returns to its previous levels of growth.

“There’s a lot of uncertainty around the world,” said Chancellor Darling. “There will be further bumps along the road, there’s no doubts about that."

The GDP figure announced today is the first official estimate and revised figures will be released in February and March.

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