'Double-dip' recession fears linger

The UK economy is growing faster than previously thought, new figures show
12 April 2012

Stronger than expected growth in the final three months of 2009 failed to dispel fears over a potential 'double-dip' recession.

The Office for National Statistics (ONS) said the UK economy grew by 0.3% between October and December - compared with the 0.1% initially estimated - after a bigger contribution from services firms.

But the recession is now officially the deepest on record as well as the longest after figures for previous quarters were revised down - leaving the UK's peak-to-trough slump at 6.2%.

Commentators also worried that the recovery could stall in the current quarter following the impact of VAT hikes as well as January's snow chaos.

ING economist James Knightley called the latest numbers "encouraging", but said the current quarter had started poorly with retail sales plunging and lending data stalling.

"The momentum we had been hoping that the UK would be carrying into 2010 may be falling away already.

"Some of the weakness will be weather related, but election uncertainty and the implications for taxes and public sector employment is likely to keep sentiment and activity subdued," he warned.

David Kern, chief economist at the British Chambers of Commerce, added: "The UK recovery remains weak, and risks of a setback to growth later in the year are still serious."

But the data will relieve some of the political pressure on the Government over its stewardship of the UK through the recession as a general election looms.

Chancellor Alistair Darling told the BBC: "These are welcome figures but I cannot stress too much that we are living in very uncertain times."

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