UK emerges from recession ... barely - Grows 0.1% in Q4
Britain's worst recession since World War II is officially over - but a less than convincing return to growth leaves British Prime Minister Gordon Brown's Labour Party on shaky ground ahead of a general election.
Britain is already the last major economy to return to growth after the global credit squeeze, and economists warned of a bumpy road ahead after the Office for National Statistics reported Tuesday that gross domestic product rose a feeble 0.1 per cent in the final quarter of 2009.
That first estimate on fourth-quarter growth was enough to officially end a grinding 18-month recession during which 1.3 million people lost their jobs, but fell short of expectations of a stronger 0.3 to 0.4 per cent rise.
Over 2009 as a whole, the economy shrank by 4.8 per cent, the worst yearly performance since records began in 1949.
The statistics office also acknowledged the possibility that the data could be revised downward in a planned second estimate and third final figure - although an upward change is more likely - which could negate the recession exit.
Even without that, Tuesday's announcement is unlikely to convince voters that Brown's Labour Party has a strong grip on the economy. An election must be held by the start of June.
The British pound dropped and gilt futures rose, factoring in the likelihood that the Bank of England will keep interest rates at record lows for some months, and possibly extend its £200 billion (US$325 billion) asset-purchasing programme to boost the money supply.
Treasury chief, Alistair Darling, has been saying for weeks that the British economy had started growing by the end of 2009 and, while he's been proved right, it was only by the skin of his teeth.
"Far from the quick recovery the chancellor has been praying for, the economy is only just staggering back into growth," said Vince Cable, the economy spokesman for the opposition Liberal Democrat party. "The British economy has had the economic equivalent of a heart attack and is still very weak."
Economists now expect Britain to struggle to reach 1.0 per cent growth this year, a sharp contrast to new forecasts from the International Monetary Fund, on Tuesday, of world economic growth of 4.0 per cent and US growth of 2.7 per cent.
Darling said "there is still a lot of uncertainty round the world" and more work to be done in Britain to aid recovery.
"Of course there will be further bumps along the road. Be in no doubt about that," Darling said after the release of the data, which was so keenly anticipated that the usually media-shy statistics office held a rare televised press conference to announce the figure.
"But I am confident that as long as we stick to the path that we have set ... that we are going to see recovery through that, back into growth," he added.
Darling also seized the moment to bolster the government's position that it's too early to trim spending to get the country's ballooning budget deficit back under control. That's a key area of disagreement with the main opposition Conservative Party which, currently well ahead in opinion polls, wants to curb spending much quicker to get a handle on the deficit.