Uk Economy Exits Recession

The UK economy has finally brought some good news after figures today confirmed the country's exit from recession. The economy grew by 0.1% in the last three months of 2009.

However, the rate at which the economy grew was weaker than expected.

BBC chief economics correspondent Hugh Pym said: "We can say that Britain has just crossed the line in coming out of recession

"It [the growth rate] was below analysts' expectations. The figure could be moved down, or indeed upwards."

In the previous six quarters the economy shrunk, marking the longest period of contraction since quarterly figures first began being recorded in 1955.

There have been some recent tell-tale signs that the economy was headed for recovery, for example last week UK unemployment dropped for the first time in 18 months. However, the Bank rate remains at it's record low of 0.5%, keeping rates on mortgages and savings accounts down.

The UK was the last major economy to remain in recession.

Germany and France – Europe's two biggest economies, both exited recession last summer. Japan and the US also came out of recession last year.

Some economists believe the move out of recession was boosted significantly by the government car scrappage scheme.

Joe Grice, from the Office for National Statistics (ONS), said that both the UK's production and service sectors grew by 0.1% during the last quarter of 2009.

The ONS figures also showed that GDP dropped by a record 4.8% in 2009.

The UK first fell into recession in the second quarter of 2008.

Throughout the 18 months of recession, public borrowing increased to an estimated £178bn, while output fell by 6%.

After the GDP figures were published, John Wright, chairman of the Federation of Small Businesses, said that the recovery remained "frail".

"In order to strengthen the recovery it is important that we boost consumer confidence and demand and that interest rates are held steady as continued investment in the economy will be the key to ensuring a sustainable recovery," he said.