The UK is officially out of recession, with the final three months of 2009 showing positive growth after six straight quarters of decline.
However, the marginal 0.1 per cent growth between October and December fell far short of the 0.4 per cent advance expected. The Office for National Statistics (ONS) figure is only a first estimate and may be revised, but the result was greeted with disappointment by experts.
IHS Global Insight economist Howard Archer said: "While the UK may be officially out of recession, it is far from out of the economic woods. Economic and financial conditions are still very challenging and the UK faces a tough job to build a decent recovery."
Experts have said that the largest contribution to growth came from areas such as retail and the motor trade, which have been helped by temporary factors.
“These sectors will have been boosted by the pre-announced VAT rise in January, and the car scrappage scheme – suggesting that, on an underlying basis, the economy only stagnated at best,” Daiwa Capital Markets economist Colin Ellis said.
Insolvency expert David Hudson, of Baker Tilly Restructuring and Recovery LLP, added that “retailers will continue to be more concerned at the rising levels of personal insolvency and continued high level of unemployment meaning that consumer spending remain tight. Only when the capacity gap sufficiently narrows, which we don’t expect until the second half of the year, will the majority of the manufacturing base see genuine recovery.”
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.
