UK out of the recession by %0.1

This is what Brown could do %0.1! 0.1% !!!!, that’s embarassing…if Brown was pinning his revival hoped on this number then he is going to be a worried man.
again 0.1%!!…hardly counts as growth

UK scrapes out of recession but growth figure disappoints City

Britain’s economy finally clawed its way out of its deepest recession since the 1930s in the fourth quarter of 2009, but it only managed to expand by a much weaker-than-expected 0.1%.

The keenly awaited figure compared with the average City forecast of 0.4% expansion. It brings to an end six consecutive quarters of contraction, which saw the economy shrink by about 6%, or 10% compared with where it would now have been had the slump not occurred.

But news of any growth will come as a relief to a Labour government facing an election within months.

A Treasury spokesman insisted chancellor Alistair Darling’s predictions of a return to growth by the turn of the year had been vindicated by the figures. “What this estimate makes clear is that the government is right to be confident but cautious about the prospects for the economy and that it is right that we keep supporting the economy.”

Shadow chancellor George Osborne said: “After this great recession, any signs of growth are welcome. But these very weak growth figures show that Gordon Brown’s government left us badly prepared for the recession and badly prepared for the recovery.

“We urgently need a new model of economic growth that includes a credible deficit reduction plan that keeps mortgage rates low, creates jobs and doesn’t choke off recovery.”

Financial markets were unhappy with the figure. Sterling dropped against the dollar and euro, to €1.14 and $1.61 respectively on disappointment that the growth figure remained so weak. Gilt futures shot up, pushing yields lower as dealers reassessed their view of the underlying strength of the economy.

Liberal Democrat Treasury spokesman Vince Cable said: “The markets will be surprised that growth has been markedly slower than expected. Far from the quick recovery the chancellor has been praying for, the economy is only just staggering back into growth.

TUC general secretary Brendan Barber agreed, adding: “These figures show just how fragile the economy is. With the threat of a double-dip recession looming large, it would be madness to cut public spending now.

“No sectors of the economy are fully recovered and areas such as construction are still really struggling.”

Jonathan Loynes, economist at Capital Economics, said the figures were a “major blow” to hopes that the UK economy had emerged decisively from recession in the fourth quarter.

Few economists, though, expect the recovery to be very strong, as the economy remains weighed down by a still fragile banking sector and high consumer and government debt levels.

David Frost, director general of the British Chambers of Commerce, said: “This is good news, but clearly growth is anaemic, and it certainly means that the economy is far from being out of the woods.”

Some analysts think the economy has only returned to growth at all because of the extraordinary support from the Bank of England in the form of ultra-low interest rates and £200bn of “quantitative easing”, as well as the government allowing the budget deficit to expand hugely.

If that support is removed too early, some argue, the economy could struggle to grow strongly. Most analysts are only expecting the economy to grow by around 1% this year, compared with its long-run annual average of 2.5%.

The Office for National Statistics revealed that the weak growth extended across the economy with industry and the dominant services sector only growing by 0.1% each in the October to December period compared to the previous three months.

“Today’s fourth-quarter GDP numbers have confirmed that the UK has finally exited recession – but barely,” said James Knightley, economist at ING financial markets.

“The recent retail sales numbers have disappointed, as has consumer confidence, while consumer fundamentals remain very poor. Indeed, household indebtedness remains at very high levels and household incomes are under downward pressure from a weak labour market and higher taxes.”

Separate figures released by the British Bankers’ Association showed another net repayment of consumer debt in December, especially of overdrafts and personal loans.

“This was clearly the consequence of many consumers’ desire to reduce their debt, low demand for credit and a lack of availability of unsecured credit from banks. It is yet another example of consumers looking to improve their financial situations in the still challenging and worrying economic environment,” said Howard Archer, chief economist at IHS Global Insight.