The Office for National Statistics has published statistics on GDP growth, and shows the economy increased by 0.4% in the forth quarter of 2009. This is revised from 0.3 per cent in the previous estimate. GDP in the fourth quarter of 2009 is now 3.1 per cent lower than the fourth quarter of 2008. For the year 2009 as a whole, GDP contracted by 4.9 per cent, compared with growth of 0.5 per cent in the previous year.
David Kern from the British Chambers of Commerce, commented in the Guardian “These figures are stronger than earlier estimates and better than most analysts’ expectations. It is important to stress that UK growth in the fourth quarter of 2009 was stronger than that of the eurozone. Nevertheless, it is clear that the UK recovery is still frail, vulnerable, and businesses are facing serious pressures.
“From now onwards, the main aim must be to ensure that the modest recovery consolidates and gathers momentum. It is critical for both the government and the monetary policy committee to pursue policies that make it possible for business to invest and export.
“A double-dip recession is still a potential threat that must be avoided at all costs. Given the dangers still facing the economy, policy must remain expansionary. Any consideration of raising interest rates and withdrawing the QE stimulus must be postponed until there is more conclusive evidence that growth is secure.”