MONEY MATTERS

After six consecutive quarters of shrinking growth, Britain’s economy has shown a 0.1% growth in the last quarter of 2009. So the 18 month long recession was officially declared over on Tuesday. Britain had been the only major economy in Europe still in recession brought about by the unprecedented global credit crunch and compounded by a massive public borrowing that has left it with a staggering 178 billion pounds budget deficit. Even as the news brought cheer to the City, experts warned that the economy was not yet out of the woods.
The fragile nature of the recovery was underlined by the fact that the growth figures were below what the analysts had predicted sparking fears that the economy could slide back into recession if the fiscal stimulus was withdrawn prematurely. Britain’s recession began in the April- to- June quarter of 2008, and was the deepest and longest since quarterly figures were first recorded in 1955. Analysts cautioned against premature celebration pointing out that a sustained period of stability was needed to avoid a relapse.
“We’re at the beginning of a move forward, and that’s a positive message. But the reality for many individuals and many companies is it’s still going to be very tough this year,” Miles Templeman, head of the Institute of Directors said. There was a concern that the GDP fell by a record 4.8% in 2009. Experts said this was a major blow to the hopes of an early and faster recovery.

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