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UK out of recession

The UK recession finally came to an end in the last three months of 2009, according to official figures.

A 0.1 per cent expansion in the economy between October and December ended six straight quarters of shrinking output, according to first estimates from the Office for National Statistics (ONS).

Overall, the economy slumped 4.8 per cent last year - the biggest annual contraction since records began in 1949 - and it has lost 6 per cent since the recession began in 2008.

A Treasury spokesman said: "The Chancellor has always said that the economy would return to growth by the turn of the year, and today's estimate of 0.1 per cent growth in the fourth quarter bears that judgment out.

"What this estimate makes clear is that the Government is right to be confident but cautious about the prospects for the economy and that it is right that we keep supporting the economy.

"Withdrawing the support that has helped us get to this point would put the recovery at risk."

The expansion in the UK economy is weaker than the 0.4% predicted by economists.

Lower-than-expected growth will fuel fears that the recovery could be weak and worries over a so-called "double dip" recession.

Public borrowing has ballooned to an estimated £178 billion in the recession, which began in the second quarter of 2008.

The UK is the last of the G7 nations to pull out of decline and an end to the slump is likely to ease political pressure on Prime Minister Gordon Brown ahead of this year's general election.

Survey data has pointed to an upturn for both manufacturing, while the first fall in unemployment for 18 months has also suggested a return to growth.

The fourth-quarter upturn was driven by the distribution, hotels and restaurants sectors, according to the ONS.

Government and other services also helped the expansion, although there was a small decrease in business services and finance in the quarter.

The beleaguered manufacturing sector increased by 0.4 per cent, having been mired in decline since the first quarter of 2008.

Today's estimate is based on just 40 per cent of the relevant data, leaving the measure vulnerable to revisions in either direction when the ONS publish their next estimate in February.

The third quarter of 2009 also came in weaker than economists had predicted, with hopes of a return to growth dashed by the ONS first estimate showing a 0.4 per cent decline, later revised upwards to a 0.2 per cent fall.

Belfast Telegraph