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UK finally limps out of recession
27 Jan 2010- Redknapp cleared of dodging tax
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The UK's fragile economy has limped out of recession - but its weak performance has fuelled fears of a further slump.
The tentative 0.1% growth in the final quarter of 2009 ended the UK's longest and deepest decline on record, according to Office for National Statistics first estimates.
But it fell far short of expert forecasts of a 0.4% rise and prompted a political storm as Chancellor Alistair Darling defended his growth predictions for the year, while Opposition parties questioned his handling of the economy.
Last year, output slumped 4.8% - the biggest annual drop since 1949 - while the economy has contracted 6% since the recession began in the second quarter of 2008.
The UK is the last of the G7 nations to technically pull out of decline, although the fragile nature of the recovery will heighten fears of a "double-dip" recession with spending cuts and tax hikes looming after the next general election.
The figures coincide with fresh forecasts from the International Monetary Fund, predicting the UK will expand 1.3% this year, compared with growth of 2.7% in the US, 1.5% in Germany and 1.4% in France.
Economists had hoped for a much stronger upturn in the ONS figures after survey data had pointed to an increase for both manufacturing and services firms, while the first fall in unemployment for 18 months has also suggested a return to growth.
But Mr Darling said the ONS results vindicated his prediction of growth before the end of 2009 and said a rise was always going to be "moderate". He added that he now predicts growth of between 1% and 1.5% this year.
"There are many bumps along the way, we are not out of the woods yet, so I think my caution is right," he told BBC Radio 4's The World At One.
But shadow chancellor George Osborne said the figure was "about as weak growth as you can get" and told the BBC that the economy was "badly prepared for recovery".
Reader views (1)
Yes, everything is fine!!! Apart from the massive Government debt, Cadbury's being taken over (falling pound), poor financial services regulation and high unemployment. Then there is the education cuts in universities and bad transport. Labour is going to be defeated at the General Election, lets just get on and have it.
- Andrew, AndrewCJYale@aol.com, 26/01/2010 18:26
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