HOPES have been raised that Britain is emerging from the recession almost a year after the UK economy first went into reverse.
An influential think-tank yesterday published research suggesting the UK economy has started to grow again, with GDP rising by 0.2 per cent in April and 0.1 per cent in May.
If the figures are subsequently confirmed by the Office for National Stat
istics, this would mean the UK is the first major industrialised nation to pull out of recession.
It would also mean the recovery was under way quicker than predicted by Chancellor Alistair Darling, who found himself mocked when he said in his April Budget that growth would return at the end of the year.
However, experts believe that, while the economy may recover on statistical terms, the reality will be months of very weak recovery and an absence of any returning "feelgood factor".
The figures, from the National Institute of Economic and Social Research (NIESR), suggested the low-point of the recession was reached in March.
Its data, based on official statistics and private-sector surveys, come after encouraging signs of a modest rise in house prices and government claims that the reduction in VAT to 15 per cent is having a positive impact.
NIESR admitted its monthly figures were subject to change, but said the picture was "coherent with the broader picture of stabilisation".
"The monthly profile points to March as having been the trough of the depression, with output rising in April and May," it added.
Earlier this week, John McFall MP, the Labour chairman of the Treasury select committee, said it was more correct to refer to "green roots" than "green shoots" of economic recovery.
The Prime Minister's spokesman said: "There are clearly signs that the action the government has taken is starting to have effect, but it remains a very, very difficult global situation that our businesses are facing. There is no room for complacency."
The UK officially entered recession in January when the ONS confirmed that there was "negative growth" in the two successive quarters at the end of 2008.
But the economy had been shrinking since May last year, and contracted by 1.9 per cent in the first three months of 2009.
Exports have been boosted by the weak value of sterling, while the Bank of England is pumping £150 billion of "new money" into the economy in an effort to kick-start lending.
At Prime Minister's Questions yesterday, Gordon Brown said major UK banks, such as the part-nationalised RBS and Lloyds Group, had agreed to provide an extra £70bn in loans as a condition of their recapitalisation deals.
Official figures also released yesterday showed that the UK's manufacturing sector returned to growth for the first time in more than a year, with an 0.2 per cent boost in output in both March and April.
However, the ONS said manufacturing output between February and April was still 13.2 per cent lower than in the same period a year earlier.
Jonathan Loynes, of Capital Economics, said the ONS figures provided a "decent platform" for wider growth in the second quarter of the year.
He added the figures bring "further evidence that the twin impacts on the industrial sector of very weak external demand and falling inventories are starting to fade".
The full article contains 565 words and appears in The Scotsman newspaper.
