Recession over, new GDP figures show
Updated on 26 January 2010
The UK economy has emerged from recession - just. Today's GDP figures show that the UK economy expanded by 0.1 per cent in the last quarter of 2009 - "an appalling number", according to Channel 4 News Economics Correspondent Faisal Islam.
The 0.1 per cent growth rate was far weaker than expected, highlighting the continued fragility of the economy.
Today's news may boost consumer confidence, but the sluggish recovery will not help Prime Minister Gordon Brown's changes of winning the general election.
Commenting on the numbers, Channel 4 News economics correspondent Faisal Islam said: "An appalling number, not so far away from remaining in recession.
"But double-edged for politics. Brown and Darling haven’t pulled off an amazing rescue act, yet. But this undercuts the argument for savage, immediate spending cuts – the Conservative argument.
"The areas that dragged the economy even to this minute growth were areas supported by stimulus spending."
And in his blog Faisal Islam notes: "By the narrowest possible margin, Britain has squeaked out of recession. It's entirely possible we could actually still be in recession, once further revisions are made in the coming weeks.
"An appalling number, saved by some growth in public sector and the motor retail trade. The breakdown of the GDP figure shows the recovery in construction has collapsed.
"This is totally consistent with the dreaded double-dip, except of course that presupposes that their has been some sort of peak from which the economy dips again. There really hasn't been."
Blogging for Channel 4 News, political editor Gary Gibbon writes: "The now long-established roughly 40:30:20 divide between the parties has not been dealt a mightly shock.
"It's not a game-changing statistic and will probably just confirm people in the camps they already sit it."
The official definition of recession is that economic output falls for two consecutive quarters. In Britain, the economy started to shrink in the second quarter of 2008 - and then shrank for another five quarters in a row.
Even if the economy did start to grow again at the end of 2009, these figures will mark two unfortunate records: the UK will have experienced the deepest recession AND the longest recession since records began in 1955.
To see how the recession unfolded in 2008 and 2009, you can look at the official ONS measure of economic growth here.
Economic output has fallen from its peak by 6.03 per cent - making it just marginally worse than the deep recession of the early eighties. And once again, manufacturing has been hit hardest.
How will the recession change the election?
- Exclusive poll: economic recovery will not save Labour
- Poll shows little sign voters will reward Brown for ending recession
- Does the end of the recession change anything?
Where the recession hit
Manufacturing output has fallen by 14.2 per cent during the recession. Construction output has fallen by 12 per cent. And the service sector - which forms the bulk of the economy - has dropped by 4.5 per cent.
Since the recession began, unemployment has gone up by 803,000 - an increase of 48 per cent. You can see the history of unemployment in the UK here.
And some economists are cautioning that growth prospects for this year are far from rosy. Vicky Redwood, UK Economist at Capital Economics, told Channel 4 News:
"The economy may be growing again, but it's certainly not out of the woods yet. We doubt that the UK will bounce back sharply this year as it has after previous recessions. After all, it has been no normal recession and is therefore unlikely to be a normal recovery."
She believes bank lending growth will be weak. British households remain burdened down with debt. And taxpayers will be facing a fiscal squeeze as the next government - Conservative or Labour - tries to shrink the enormous budget deficit.
