Economy 'Turns Corner' Says Northern

News today that the UK economy has come out of recession has been welcomed by a senior local banker.

The UK was the last major economy still in recession, but today's figures - while positive - showed it had only grown by a weaker-than-expected 0.1% in the last three months of 2009.

But along with other recovery signs - such as UK unemployment levels falling for the first time in 18 months - the data shows the UK economy has turned a corner in terms of exiting recession.

However, the overall recovery is still very fragile after having previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955.

Angela McGowan, Northern Bank Chief Economist said: "Although the latest data for economic output (GDP) in the UK was widely anticipated, the overall figure was a little below the consensus forecast (which was for growth of 0.4%).

"Unfortunately the UK's recovery has lagged behind other major economies and the strength of that recovery is also expected to be weaker for a number of reasons.

"In the first instance, UK debt levels will force the Government to withdraw the fiscal stimulus before other countries withdraw their measures," she commented, noting that high levels of personal debt in the UK means that domestic demand in the UK will be relatively weak going forward.

"In addition," she said, "the financial sector, which plays a significant role in the UK economy, still remains fragile.

"Overall, UK economic output is expected to grow by 1% over the whole of 2010, which by historical standards is well below par.

"The UK data is consistent with Northern Bank forecasts which also showed that the Northern Ireland economy pulled out of recession at the end of 2009.

"However, like the UK, local economic growth remains weak," she admitted.

But, the news may be significant for policy-makers and economists and might even go some way towards rebuilding consumer confidence.

"However, while the economy has 'technically' moved out of recession, those people who have lost their jobs over the last year and a half will not be able to treat today's data as particularly significant for improvement of their job prospects," she concluded.

See: UK Emerges From Recession

(BMcC/GK)