UK Recession Officially Over… For Now
26 January 2010 / by Andy Davies
Britain has come out of the recession, as official data has revealed that the UK economy grew by 0.1 per cent in the last quarter of 2009.
The news brings an end to six consecutive quarters of contraction, which saw the economy shrink by 6.2 per cent.
The largest contributor to the positive growth came from distribution, hotels and restaurants, which grew by around 0.4 per cent.
Meanwhile, business services and finance growth was flat compared to a decrease of 0.8 per cent in the previous quarter.
However, despite the economy’s latest GDP figures revealing growth for the first time since the first quarter of 2008, it is still below the 0.4 per cent figure that had been predicted by some economists.
Commenting, Jeremy Cook, chief economist of foreign exchange broker, World First, has not welcomed the latest figures.
“This is a nightmare for sterling. The run of good data for the UK economy has definitely ended and while we are glad the UK is out of recession in technical terms, this does signify that we are only just setting out on the long road to recovery.
Meanwhile, Mark Bolsom, head of the UK trading desk at Travelex, also urged caution and stressed the chances of a double dip recession ‘cannot be ruled out’.
“Although a step in the right direction, investors will be disappointed given the huge amount of stimulus employed by the authorities to boost the economy.
“Investors may be cautious about over-estimating the pace of recovery, and concerned that the Bank of England has yet to close the book on Quantitative Easing,” he said, before suggesting that the data is “utterly intangible to the everyday UK consumer and business”.
“Unfortunately, we forecast a bumpy couple of years for UK consumers and businesses,” he added.
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