UK economy grows in last quarter of 2009; recession ends

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Tuesday, January 26, 2010

According to government figures, the UK economy grew by 0.1% in final quarter of last year, thus officially ending the country's recession. The rise was weaker than the 0.3%–0.4% predicted by economists.

Previously, the economy had shrunk for six consecutive quarters, the longest since records were started, in 1955. However, during the entire of 2009, 1.3 million people lost their jobs.

The statistics office noted it was possible that the numbers might be revised downwards, after an anticipated second estimate - and the third, final number - which would mean that the recession wouldn't have officially ended after all. The Miami Herald, however, reports that it's more likely the statistics would be revised upwards instead.

"Of course there will be further bumps along the road. Be in no doubt about that," said treasury chief Alastair Darling. "But I am confident that as long as we stick to the path that we have set [...] that we are going to see recovery through that back into growth."

John Wright, the chairman of the Federation of Small Businesses, however, commented that the economic recovery was still "frail", saying that "in order to strengthen the recovery it is important that we boost consumer confidence and demand and that interest rates are held steady as continued investment in the economy will be the key to ensuring a sustainable recovery."

The chief economist for the manufacturers organisation EEF, Lee Hopley, also commented on the figures. "Whilst today's data confirm that manufacturing is now out of recession, they also continue to raise questions over the health of the wider economy. The trajectory for the recovery, particularly in the next six months, is an uncertain one and the best prospects remain an export-driven turnaround."