Uk Economy Sees A Boost!

By Author: Sadhana Dhanyal
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The official figures have shown that UK economy emerged from recession in the fourth quarter of last year at a faster pace than previously estimated. According to the Data from the Office for National Statistics, the economy grew 0.4% between October and December 2009.

The growth was faster than the previous estimate of 0.3 % growth during the quarter. The upward revision has been mainly stated due to higher output from services, construction and agriculture. The ONS has revealed that for the year 2009 as a whole, GDP contracted by 4.9%. However, the previous estimate had been for a contraction of 5% over the year. And GDP in 2008 saw a rise of 0.5%.

The UK is experiencing a healthy boost. It is a welcome change by most of the people. Despite the positive developments, it is expected that the ride is going to be a bumpy one. Some separate figures showed that Britain's current account deficit narrowed by more than expected over the quarter to £1.684bn from £5.912bn, the lowest since the first quarter of 2008.

The output of the production industries was unrevised at 0.4% following a fall of 1 % in ...
... the third quarter of 2009 Q3. The manufacturing output grew by 0.8% compared with a fall of 0.3% in the previous quarter. Moreover, construction output fell by 0.9%, compared with the 1.8% increase in the previous quarter.

Besides this, service sector output was unrevised at 0.5% in the fourth quarter, up from a fall of 0.2% in the previous quarter. The growth was stronger in distribution, transport and business service. These sectors saw a positive change. This is one of the reasons for the positive development of the economy. The growth is slow and steady.

Despite all the positive developments, according to Jonathan Loynes, economist at Capital Economics, has stated that the headline GDP number was good news. However, he warned: There were some less encouraging aspects to the figures too. Growth in Q4 was still heavily reliant on public spending and inventories, both areas which are likely to be weaker in coming quarters.

The British Chambers of Commerce (BCC) had forecast GDP growth in 2011 at 2.3% but now says it will be nearer 2.1%. It also stated in its later forecast that the obstacles to a sustained medium-term recovery now appear greater. Even though recession has ended, however it is believed there is no room for complacency.

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