Breaking News: Economy creeps out of recession
THE UK economy only just emerged from recession in the last quarter of 2009 with GDP rising 0.1%.
The Office of National Statistics said the economy had grown for the first time since the first three months of 2008.
The improvement was driven by improved sales in the motor trade, which was boosted by the Government’s cash for bangers scheme to stimulate demand.
The economy had previously shrunk for six consecutive quarters – the longest period since quarterly figures were first recorded in 1955.
The ONS said the figures were based on estimates with just 40% of the data needed, meaning they could be revised up, or down.
Officials said there had been 0.1% growth with the service sector – which accounts for 70% of total economic output. Within this, there was 0.4% growth in the distribution, hotels and retail sub-sector, which includes car sales.
Reaction to the announcement from Yorkshire’s business community was mixed.
Ian Williams, director of policy at Leeds, York and North Yorkshire Chamber of Commerce, said: “Today’s announcement that the UK economy grew in the fourth quarter of 2009 reflects what many of our members are telling us. Business confidence is beginning to return and the market is improving.”
Miles Templeman, director General of the Institute of Directors, said: “Conditions for most businesses are still very tough, and today’s figures confirmed that the UK economy is barely moving. It’s likely that the bottom has been hit, but we will be staying there for a while.”
Adrian Allen, partner at the Leeds office of Baker Tilly Restructuring and Recovery, said: “Whilst economists may be rubbing their hands in glee at the upsurge in the health of UK plc, the stark fact is that many businesses will fight to survive during 2010 and the tiny, 0.1% increase in Britain’s economic health will mean nothing to them on a practical level.
“Whilst any indicator of an improvement in our financial health is good news, there is still a long way to go. HMRC recognises this with its ‘time to pay’ agreements deferring payment for over 25,000 companies that have fallen into arrears; other creditors and lenders need to be aware that the health of the country as a whole still has a long way to go.
Will Oxley, partner at Grant Thornton’s Leeds office, said: “Today’s announcement that the UK is officially out of a recession has been a long time coming considering the rest of Europe and the US returned to growth some six months ago. Whilst everyone will be breathing a collective sigh of relief across the country, economic growth of 0.1% is lower than expected and hardly a resounding vote of confidence.”
Richard Kendall, policy executive at Hull & Humber Chamber of Commerce, said: “The official confirmation that the recession has ended is good news, even though growth in the last quarter was anaemic.
“Trading conditions remain very tough. The recovery is getting underway but it will be slow and is not guaranteed. Although businesses are more confident about the next few months, long-term uncertainty remains. In the short term it will not feel like the recession has ended.”
