UK economy emerges from recession

The UK economy has come out of recession, after figures showed the economy had grown by 0.1% in the last three months of 2009.

The economy had previously contracted for six consecutive quarters – the longest period since quarterly figures were first recorded in 1955.

There have been recent recovery signs – last week UK unemployment fell for the first time in 18 months.

The UK’s had been one of the last major economies still in recession.

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

The UK recession began in the April-to-June quarter of 2008.

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

First estimates of how the economy has performed are made with about 40% of the data available, and Investec economist David Page has warned there is “plenty of room for surprises” in the figures.

sourced from the BBC

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Will the recession end on Friday 23th October

Will the UK be out of recession from Friday 23rd October, or will the financial and  fiscal  results show we are still very much in recession.

Lets wait and see. (the answer is no)

Record recession for UK economy

The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.

Retail sales were flat in September, which did not help overall growth

It is the first time UK gross domestic product (GDP) has contracted for six consecutive quarters, since quarterly figures were first recorded in 1955.

But the figures could still be revised up or down at a later date, because this figure is only the first estimate.

GDP measures the total amount of goods and services produced by a country.

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Recession in Britain 'at an end'

Confidence among business professionals has surged, suggesting the recession is at an end, a survey has said.

The banking sector saw a big rise in confidence

 

The Institute of Chartered Accountants’ index of business confidence rose to 4.8 at the end of June, from -28.2 in March, the biggest rise for two years.

However, chief executive Michael Izza warned against “underestimating” the challenges ahead for businesses.

The institute predicts the UK economy will grow by 0.5% in the third quarter.

Its forecast comes after the economy shrank by 0.8% in the second quarter of the year.

More than 1,000 chartered accountants were surveyed across England, Wales and Scotland.

“This quarter’s Business Confidence Monitor suggests that the UK recession is at an end,” said Mr Izza.

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Markets rise on US recovery hopes

World stock markets have risen after US central bank chief Ben Bernanke said the world’s biggest economy was nearing the start of a recovery.

Ben Bernanke said the recovery is likely to be relatively slow at first

 

“The prospects for a return to growth in the near term appear good,” Mr Bernanke told a conference in Wyoming.

On Wall Street, the Dow Jones index rose more than 1%, while European markets were also sent higher.

But the Fed boss said unemployment, which is expected to top 10% in the US, would fall “only gradually”.

However, European Central Bank president Jean-Claude Trichet expressed concern at what he saw as premature talk of a full recovery. 

After contracting sharply over the past year, economic activity appears to be levelling out, both in the United States and abroad Ben Bernanke, Federal Reserve chairman

“I am a little bit uneasy when I see that, because we have some green shoots here and there, we are already saying, ‘well, after all, we are close to back to normal’,” he said, speaking later at the conference.

‘Slow at first’

Central bankers were speaking as data showed sales of existing US homes rose by more than 7% in July.

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Bank of England to pump another £50bn into economy

Quantitative easing has mushroomed since March

The Bank of England is pumping another £50bn into the UK economy in a further attempt to lift it out of recession.

Britain’s central bank will raise the total amount of new money created under the quantitative easing (QE) programme to £175bn. The move is bigger than economists had expected, with the Bank admitting the recession had been “deeper than previously thought”. It also noted that the world economy is still in recession.

City economists broadly welcomed the decision, which sent the FTSE 100 index up to a new high for this year of 4729.58, but pushed sterling down against the dollar.

Stephen Boyle, head of RBS group economics, said: “We won’t know for another few quarters if the first £125bn of asset purchases by the Bank of England has managed to stop the rot, but the monetary policy committee has clearly decided that it’s better to be safe than sorry and will buy another £50bn of bonds.

“This tells us that the committee believes the UK economy remains in intensive care and that a bigger defibrillator is needed to help it emerge from the worst downturn for a generation.”

The Bank also kept interest rates at 0.5%, the lowest on record, as expected.

Alistair Darling, the chancellor, has given his approval for the Bank to extend the QE programme, which was previously capped at £150bn, with £125bn having been used so far.

Treasury minister Stephen Timms said the government and the Bank had been talking about extending the QE programme over the last few weeks. He added that “more encouraging data” in the last few days indicated that QE was starting to help the economy.

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U.K. Recession Triggers Social Decay

Global Financial Crisis

Javier Espinoza, 08.12.09, 12:41 PM EDT

 As unemployment rises, the U.K. is facing a wave of increased domestic violence, homelessness, alcoholism and drug addiction.

LONDON — The recession is painting a bleak picture of the future of the British society. Crime, mental health problems, domestic violence and drug addiction are set to rise as unemployment reached a 14-year high on Tuesday, a leading public sector watchdog warned on Wednesday.

“We are starting to see some of these things happening. We have also seen an increase in demand for debt advice, more people claiming benefits–and if unemployment keeps rising, we will see an increase in domestic violence and abuse,” said Diane Ridley, author of the report entitled “When it comes to the crunch” published by the Audit Commission.

Ridley also said local authorities were not ready for what she described as the “next wave of the recession”. According to the researcher, the recession will have three phases: The first one is defined by declining gross domestic product and rising unemployment. She said Britain is about to face the second phase in which output turns around but long-term unemployment triggers a whole range of social problems. And, finally, when growth returns some areas of British society will bounce back quickly but others will be left out and inequality will eventually rise.

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Recession watch: which nations' GDP is still going down?

Economies in the UK and US are still suffering, while France and Germany are growing again – and some countries have dodged the recession completely. Find out which is which.

GDP growth around the world: a pile of money Photograph: Simon Crisp/www.newsteam.co.uk

Hopes that the economic slump has bottomed out were boosted today when
Japan, the world’s second-largest economy, joined Germany and France in
pulling out of recession. By contrast, Britain remains mired in the downturn, although it too is expected to come out of recession soon. In the United States, the latest comments from the Federal Reserve are the clearest indication yet that the world’s largest economy may have turned the corner.

GDP is the reason for the optimism. But how has it changed. This is the latest data.

sourced from The Guardain

please press more to see chart

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Turnaround 'will not be simple'

The world has begun to recover from recession but the process will not be simple, the International Monetary Fund (IMF) has warned.

Serbia has been particularly hard hit by the global recession

The recession had “left deep scars, which will affect both supply and demand for many years to come” said IMF chief economist, Olivier Blanchard.

His comments came after Japan this week followed France and Germany is seeing their economies return to growth.

The IMF said in July the economy was “starting to pull out of recession”.

‘New shape’

In this latest report, Mr Blanchard predicted that global output may also remain lower than it had been before the crisis.

Countries must rebalance their economies to make it sustainable, Mr Blanchard said.

Economies dominated by consumption – such as the US – would have to focus more on exports, while Asia turned more to imports, he said.

He also said that dysfunctional financial systems in many advanced countries would need “a long time to find their new shape”.

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'Fragile recovery' for UK economy

The Bank of England has warned that the UK economy still has some way to go before it recovers from the effects of the financial crisis.

In its latest quarterly Inflation Report, the Bank warns that any recovery in 2010 will be “fragile”.

The report will be bad news for the chancellor, who has predicted that the UK will rebound sharply in the future.

If it does not, then his record budget deficit of £175bn will be even bigger, with a greater need for spending cuts.

View BBC video

“Any 2010 recovery will be fragile”

 

On the outlook for inflation, the Bank said it was “more likely than not” that the annual rate of growth in consumer prices would temporarily fall below 1% in the autumn and stay low until the end of its two-year forecast period.

This implies, unless something changes, that interest rates could stay at 0.5% until well into 2011, BBC economics reporter Steve Schifferes says.

‘Uncertain pace’

The Bank has recently added another £50bn of new money to the economy, as part of its programme of quantitative easing (QE) to spur economic growth.

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Sainsbury's to boost Scots jobs

Sainsbury’s has announced plans to expand in Scotland, creating 1,300 jobs by next summer.

The new posts will be created through new stores at Strathaven in Lanarkshire and Prestwick, in Ayrshire, and the extension of existing shops.

Sainsbury’s also said the move would give Scottish suppliers more opportunities to sell their produce.

Sainsbury’s has embarked on a nationwide expansion Supermarket giant

The announcement came amid a drive by the company to open 150 convenience stores by 2010-11.

read full article at recession2009 – Food

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