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The UK is set to move out of recession and start growing again before the end of the year, an influential industry body declared today.
The Institute of Chartered Accountants in England and Wales said optimism among professionals moved to its highest level for two years in the current third quarter of 2009.
The confidence measure jumped from minus 28.2 to 4.8 — the biggest rise on record and the first positive reading since the credit crunch started in 2007.
Based on the results of the Business Confidence Monitor, the ICAEW predicted a 0.5 per cent rise in economic output this quarter.
It comes after a decline of 0.8 per cent in the second quarter and 2.4 per cent in the first following three quarters of contraction in 2008.
ICAEW chief executive Michael Izza said: “This quarter's BCM suggests the UK recession is at an end. While there is no doubt the economy is on its way to recovery, we shouldn't underestimate the challenges ahead for businesses.”
The forecast will be welcomed on Downing Street where Gordon Brown and Chancellor Alistair Darling have confidently predicted that the UK economy will start growing again before the end of the year.
France and Germany have already moved out of recession, along with Japan.
However, economist Nouriel Roubini, dubbed Dr Doom for his gloomy forecasts, today warned that the global economy could dive back into recession after a brief period of growth.
“The recovery is likely to be anaemic and below trend in advanced economies and there is a big risk of a double-dip recession,” he said.
The CBI also warned that the UK's dominant service sector is still in recession. Lai Wah Co, head of economic analysis, said: “Business conditions remain difficult for service sector firms.
“However, activity has been nowhere near as weak as in recent quarters and things are starting to look up.”
The ICAEW survey found that 41 per cent of senior business professionals were more confident about their economic prospects in the next year.
But only six per cent were much more confident, indicating a continued level of caution over the recovery.
IT was the most optimistic sector, followed by banking, finance and insurance firms.
Positive signs on the housing market have also helped to boost optimism for property firms.
Health and education professionals were least confident as fears of public sector cuts grow.
Reader views (22)
I'm still not convinced that Keith Price isn't really a sneaky tory who is simply highlighting the willful silliness of Labour's socialism with his copy & paste commentaries. Just to put the article in perspective - while technically an improvement, coming from catastrophic to merely life destroying ruination is not exactly something that Joe Blow in the street would recognise as being a giant leap forward.
- Rogan, Irving, 24/08/2009 19:47
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to Keith Price from Luton: your messages make me laugh every day! Pure comedy! Doesn't everyone realize Keith is joking? Keep posting them!
- Carsten, London, 24/08/2009 16:53
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Yes the economy will grow.And so will the interest on the National debt along with repayments on all those interest only mortgages (multiples of x8 of salary phew!)as interest rates rise on the back of rising inflation.Repossessions and mortgage arrears will no doubt grow also along with unemployment figures as our overstuffed public sector begins to shed all those non jobs.
I have no doubt that Keith Price of Luton will also grow-UP very quickly! Or more mercifully he will just shut up.
- Andrew Nicholls, Ely ,England, 24/08/2009 15:15
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Don't believe a word,more smoke and mirrors from the usual suspects,until something is done about the five million unemployed there can be no lasting recovery.
- Auf Deutsch, Canterbury Kent England, 24/08/2009 14:18
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Keith Price: you've posted that exact same wording on 3 seperate articles now - are you sure you're not some sort of fiendish robot side-kick to the Villain Brown . . . ?!
- Roz, France, 24/08/2009 13:47
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Keith Price, Luton
You're so predictable. you're clearly NOT one of those UK citizens who have lost their job, their house or their pension fund as a direct result of crash Gordon'r diabolical mis-management of the UK economy. Whether we return to growth by the end of the year or not is NOT the issue. To kid yourself that the depth of the recession in the UK has been less severe than in other countries is naive in the extreme. It's ok for you "I'm alright jack" Gordon supporters, but many others in the Uk have been VERY severely impactd by Nu-Labour's failures on the economy. Just look at the size of the debt mountain, the state of the pound, the number of unemployed - get real Keith.
- Malcolm, London, 24/08/2009 13:39
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So, Chrys LONDON, what do YOU think about sterling??
- Paul, London, 24/08/2009 13:36
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How can we be moving out of recession when oil prices are still on the increase. Everything dependant on oil will be passed on to the consumer who cannot afford it. Higher prices leading to fewer sales, leading to higher unemployment, leading to inflation and guess what? A recession.
- Bj, London, 24/08/2009 13:20
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Recovery at the end of 2009? In a pig's ear!
And, Keith, we look for your name but don't read the attached tripe - so why not move on?
- Ted, London, 24/08/2009 13:18
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We will only really know that we, as a country are truly doing better once more people are employed in manufacturing and localised services.
Otherwise we simply add to the mistakes of the past 12 years.
Have we not learned that house price inflation, personal debt, easy credit and excess expenditure on imported "luxessities" are bad things?
Have we not learned that rewarding the greedy and the feckless at the cost to the prudent and hard working are bad things for society?
Have we not learned that encouraging and rewarding parasitical benefit lifestyles via "jobcentres" advisory services is infuriating normally tolerant hard working low income earners - again bad for the mental wellbeing and cohesion of society?
So, we must remember that rebuilding our economy on the same unstable foundations as before must be wrong, and will surely lead to future societal meltdown.
For once the providers (taxpayers) have lost their willingness to work hard and stand on their own two feet, then in the end everyone loses.
The only sure sign of recovery is falling unemployment based on localised people in productive jobs, together with less demand for imported decadance - and that may take some years yet – a true testament to just how much damage has been done to our economy and the peoples attitude of what`s truly of value in their lives.
- Darius, London UK, 24/08/2009 13:16
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Yes! Great news! Shame about the near 1 trillion debt we will be paying back for the next 50 years…
- Paul, London, 24/08/2009 13:04
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When you've fallen down a big black hole the journey back to the surface is long and tortuous.
- John, Prestbury, 24/08/2009 12:57
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Time to dump Sterling, it is clearly pointless having it.Time to dump Sterling, it is clearly pointless having it.Time to dump Sterling, it is clearly pointless having it.Time to dump Sterling, it is clearly pointless having it.Time to dump Sterling, it is clearly pointless having it.Time to dump Sterling, it is clearly pointless having it.
- Chrys, LONDON, 24/08/2009 12:03
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Oh, oh... time to keep your heads down, the "experts" are back in town!
Are these the same experts that predicted a hot summer for the UK? Or that 94,000 people would be dead from swine flu by now?
Expert is a much overused word, especially for people that are anything but.
- Nobby Clark, Perth, the Scottish one, 24/08/2009 11:55
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Well done Gordon Brown for rescuing the country from the worldwide economic recession, which has hit many other countries far harder than it has us here in the UK
- Keith Price, Luton England, 24/08/2009 11:43
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These are all the experts that could have seen it all coming - but didn't. Enough said about experts.
- Never Eat Tuna Again, London, 24/08/2009 11:39
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All these experts said that boom and bust would never happen again and we that could continue living in la la land and borrow 5 times against income for a mortgage. I don`t beleive a word they are saying. There is still too much debt in this country, which has yet to surface. I personally think we are in a W shaped recession with recession Mk2 to follow at the start of next year. I don`t think these individuals will be so cheerful when the public sector starts cutting back and their suppliers see their orders drop. Its in everyones interest for the recession to be coming to an end; but I don`t think that will be happening for a while yet. Some if, buts and maybes is not sufficent evidence for me that it is happening just yet.
- B Gare, Norfolk Gorleston, 24/08/2009 10:53
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"Time to dump Sterling, it is clearly pointless having it." ... rubbish! The ability to set our own monetary policy is vital. OK, France & Germany may have posted a quarter of growth (though watch out for revisons), but the Euro is crucifying the rest of Europe... They don't call Portugual, Ireland, Greece and Spain 'the PIGS' for nothing.
- Paul, London, 24/08/2009 10:53
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Its a bit like swine flu. The first round was mild but the next one (next month) will wipe us all out. So to with the economy...we'll need wheel barrows of bank notes just to pay for a loaf of bread. We can't elect Cameron too soon. He is the only one who can save us from both of these otherwise impending dooms.
- Peace Maker, Battersea, 24/08/2009 10:44
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Just before Keith tells us what a great job Crash has done again, can I pick up on Alan's point about the devaluation of the pound. Keith, is the recession is a global problem, why is sterling the only currency to have plummeted against all the others?
- Marianne, SW France/London, 24/08/2009 10:43
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Of course all the property owners and the Fat Cats want to say we are coming out of recession but its the hill before the big fall.
- Beth D, London,United Kingdom, 24/08/2009 10:31
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How come we are so behind the Eurozone yet again?
How come the devaluation of the pound has done nothing to help us?
Time to dump Sterling, it is clearly pointless having it.
Time to tell BNP/UKIP 'keep Britain poor' voters where to go!
- Alan, Islington, Europe, 24/08/2009 09:48
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