There are clear signs the UK economy is now out of recession, but it faces a bumpy road ahead, Chancellor of the Exchequer Alistair Darling said following the release of highly disappointing Q4 GDP figures.
The Q4 data showed the economy only growing 0.1% on the quarter, which technically marks the end of the UK recession.
“If you look at what is happening across the world, what is happening in this country there are now clear signs that we are coming through the recession, that we are now out of recession,” Darling said in a Sky TV interview.
Source: iMarketNews
The US Commerce Department said this morning that consumer spending fell 0.5 percent in September – the largest single month fall in nine months. While the overall economy grew in the quarter ending in September, government spending programs and other initiatives helped inflate the results, and once the programs wound down, consumers immediately cut back.
This is causing concern with economists who worry that the recovery could stall in the next quarter as consumers are still facing continuing unemployment and a growing foreclosure rate. For this reason, analysts warn that a “double-dip recession” cannot yet be ruled out.
Associated Press
For the first time since the second quarter of 2008, the US economy recorded positive growth, expanding 3.5 percent in the quarter ending in September. Despite the upbeat news, analysts suggest that much of the growth can be traced to government stimulus spending which is expected to wind down over the next few months. For this reason, market watchers remain unconvinced that the US can maintain the same rate of growth over the next quarter.
“It’s good to have the economy growing again,” said Brian Bethune, economist at IHS Global Insight. “But we don’t think that rate of growth is sustainable because it is distorted by all the government stimulus.”
BBC News
