by Mark Johnston
Britain Comes Back from Double Dip Recession.
Recent ly published figures showed that Britain has bounced strongly out of recession over the summer, helped by the olympic games. Therefore meaning that the UK’s economy is back in growth, thus ending the longest period of double dip recession since the Second World War.
The figures showed that the nation’s output jumped by one per cent in the three months to the end of September , which is far faster than City economists had originally forecast.
The economy grew by 1.0 per cent, according to official gross domestic product figures (GDP), which measure the value of everything produced in the country.
They also showed that this is the best quarterly growth since the Northern Rock disaster in 2007.
Although the economy is still no bigger than it was a year ago, and 3 per cent smaller than it was before the financial crisis hit.
The Bank of England deputy governor Charlie Bean, declared that Britain’s economy was past the worst and added that “looking at the UK economy, the expectation is growth should be picking up. There is bound to be volatile movement from quarter to quarter, but the underlying trend is for growth.’
Chief economist at foreign exchange company, World First, Jeremy Cook, said: “While this is undoubtedly a welcome surprise, upon breaking down the numbers we should not get caught up in a flurry of champagne corks and party poppers. Overall underlying true growth is only 0.3 per cent at the moment -, which means it is very much in the ‘bouncing along the bottom’ region.”
Kevin Daly, an economist at Goldman Sachs, said he thought that underneath the statistical distortions, the economy had actually been growing at a sluggish rate all year.
David Cameron, the prime minister, said “There’s still a long way to go but these figures show we are on right track with the right approach.”
However, Shadow Chancellor Ed Balls said “while the emergence from recession is good news it has come after a year of damaging flatlining. With living standards falling, more tax rises on the way, small business lending down and the eurozone still in crisis, it would be very unwise of David Cameron and George Osborne to just sit back, cross their fingers and hope for the best.”
Few expert actually believed the better data signalled the start of a strong economic recovery as confidence among households remains fragile.
Bank of England Governor Sir Mervyn King has called it a “zig-zag” recovery.
Simon Wells, an economist at HSBC, said: “We’re past the worst but we’re still moving only very slowly towards normality. I remain very cautious about the UK outlook.”
The Chancellor of the Exchequer George Osborne, added that “Yesterday’s weak data from the euro zone were a reminder that we still face many economic challenges at home and abroad.”
The UK economy desperately needs an injection of confidence, but this however is no time for complacency and wishful thinking.
Story link - Britain Comes Back from Double Dip Recession.
Related stories to : Britain Comes Back from Double Dip Recession.