Recession ends for the UK

The Bank of England

Figures out today from the Office for National Statistics (ONS) have shown that the UK economy has officially come out of recession, as the economy grew by 0.1 percent in the last three months of 2009.

The economy had previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955.

There have been recent recovery signs - last week UK unemployment fell for the first time in 18 months.

Exiting recession

The UK's recession began in the April to June quarter of 2008, leaving the UK as one of the last major economies to exit the recession.

Last summer saw Europe's two biggest economies - Germany and France - coming out of recession. While Japan and the US exited recession last year.

During 18 months of recession, public borrowing increased to an estimated GBP£178 billion, while output slumped by six percent, the BBC reports.

Although the ONS published only limited data today, the country's services sector, which accounts for a lion's share of gross domestic product, and manufacturing helped pull the economy from a slump whose length and severity eclipses that of any since the Great Depression.

Celebrations will be delayed as "Serious doubt remains about the strength and sustainability of the UK's recovery given the still very challenging economic and financial environment it faces," said Howard Archer, an economist at Global Insight to the British paper The Telegraph.

The UK still faces challenges, with a banking sector still riddled with bad loans, a fragile housing market and the need to rein in the country's record budget deficit. With the economy expected to return to growth, attention will need to turn to the Bank of England, as it begins unwinding the stimulus plan it unleashed to prevent a depression.

Still interest rates remain at the record low level of 0.5 percent and the Bank has injected GBP£200 billion into the financial system.

More information to follow.

Related News:

Europe exiting recession |IMF warns of 'double-dip' recession |Doubling in credit card bad debt |Interest rates freeze continues: but for how long?

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