Is it really so bad in the United Kingdom after all

[size=150:1ji5ek9y]Longest recession for 100 years ends at last as output finally returns to 2008 levels

Figures show economic output last month nearly at pre-crisis levels
News will be a boost for George Osborne ahead of 2015 general election
Recovery triggers speculation that Bank of England will raise interest rates

[size=85:1ji5ek9y]By Hugo Duncan
Published: Updated: 11:27, 9 May 2014

George Osborne received a boost today after figures showed output towards the end of the month close to pre-crisis levels

The longest economic downturn for more than 100 years is finally over, experts said last night.

Figures today reveal that output at the end of last month was ‘incredibly close’ to the pre-crisis level of 2008 after a storming start to the year.

Jack Meaning, an economist at the influential National Institute of Economic and Social Research think-tank, was confident that nine days into May, output will have surpassed the pre-crash high.

‘By now we will have breached the pre-recession peak,’ he said last night.

The growth spurt at the start of 2014 means the recession is finally over, in a major boost to George Osborne just a year before the General Election.

This week the Organisation for Economic Co-operation and Development (OECD) said the Chancellor has been ‘proven right’ in his decision to stick to his austerity plans in the face of opposition from Labour, the unions and other Left-wing critics.

The vote of confidence from one of the world’s leading watchdogs came as research group Markit suggested British firms are hiring 100,000 new staff a month – equal to 1.2million a year.

But the recovery has triggered speculation that the Bank of England will be forced to raise interest rates before the end of the year, having held them at an all-time low of 0.5 per cent since 2009.

‘Record low interest rates are no longer necessary,’ said Rob Wood, a former economist at the central bank who now works at Berenberg Bank. ‘The economy is growing rapidly and, if anything, is picking up pace.’

Gross Domestic Product – the total size of the economy – dropped by 7.2 per cent in what has been dubbed the Great Recession of 2008 and 2009 under the last Labour government.

But figures from the Office for National Statistics suggest output was still 0.6 per below the pre-recession peak at the end of the first quarter in March this year.

The National Institute, which is releasing the GDP figures today, is expected to say the economy grew strongly in April, leaving output within 0.1 per cent of the level reached before the crisis.

‘Growth seems to have become entrenched in the UK,’ said Mr Meaning. The outlook is pretty robust.’

The Bank of England pegged interest rates at 0.5 per cent again yesterday despite the economy improving

The think-tank predicts growth of 2.9 per cent this year and 2.4 per cent next year – up from February’s predictions of 2.5 per cent and 2.1 per cent.

Unemployment, which has fallen from 7.9 per cent a year ago to 6.9 per cent today, is expected to drop to 6.3 per cent this year and 6 per cent by 2016.

However, the National Institute said GDP per capita – the size of the economy as a proportion of the population – will not surpass its pre-crisis peak before 2017.

Mr Osborne has declared that ‘Britain is coming back’ but warned that the recovery cannot be taken for granted.

The Bank of England pegged rates at 0.5 per cent again yesterday. But speculation is mounting that the monetary policy committee will be forced to act on rates before too long to cool the housing market and stop the wider economy overheating.

The National Institute is not expecting borrowing costs to rise until the second quarter of next year. However the pound has soared to close to $1.70 against the US dollar – up 14 per cent in less than a year – on expectations of an early rate rise.

Alex Edwards, an expert at the online currency transfer provider UK Forex, said: ‘Markets are increasingly pricing in a rate hike as early as December or January. ::

On the flip side, some whispers that ECB may actually drop the interest rate to Zero, there is a genuine fear of deflation in the Eurozone at the moment.
One thing that isn't mentioned often (about the UK economy) a lot is made of the unemployment figures, tho very little about the record numbers "
in employment"
, tho what "
in employment"
actually is, is open to scrutiny.
Should be good for the exchange rate, if of course you use your Pounds to buy Euro/Lev!

Hmmmm - talking to some locals they are definitely not convinced of the end of recession. The Co-Op is in serious trouble and Barclays are just about to make thousands of staff redundant mainly in the investment side. They are saying they are returning to ordinary banking. So the wheel is about to come full circle. As for employment figures- they are just juggled like a political football. Many people , my Hero included, are on zero contracts which is a new term on me. Basically means that staff are called in when work increases and otherwise go back to be unemployed although they are not because they are on standby for their employer. On top of that, its difficult to get other work because its never known when there will be work available with the employer. No-one seems to believe a word politicians say now so there will be less and less people voting when the time comes.

In spite of the difficulties, we are happy and the weather has been great! Englands definitely not as bad as many say and I feel safer as a retiree than I did in Bulgaria in the latter years having worried about exchange rates and property losses. I still miss the life in our little village though but we can't have everything we want in life can we?

Nice to hear from you Oldun - politicians pull all strokes to get votes and figures are juggled according to who is expected to read them.

oldun wrote:

Hmmmm - talking to some locals they are definitely not convinced of the end of recession. The Co-Op is in serious trouble and Barclays are just about to make thousands of staff redundant mainly in the investment side. They are saying they are returning to ordinary banking. So the wheel is about to come full circle. As for employment figures- they are just juggled like a political football. Many people , my Hero included, are on zero contracts which is a new term on me. Basically means that staff are called in when work increases and otherwise go back to be unemployed although they are not because they are on standby for their employer. On top of that, its difficult to get other work because its never known when there will be work available with the employer. No-one seems to believe a word politicians say now so there will be less and less people voting when the time comes.

In spite of the difficulties, we are happy and the weather has been great! Englands definitely not as bad as many say and I feel safer as a retiree than I did in Bulgaria in the latter years having worried about exchange rates and property losses. I still miss the life in our little village though but we can't have everything we want in life can we?

:Good post:oldun, I do miss your posts, so it is good when you pop in with your mostly positive and the odd negative contribution, it's also good to know that you are both well and safe and enjoying the UK weather

:Thank you:Willow. I am still very positive but probably not quite as I was in Bulgaria. Some people might be pleased to hear some negativity because I have come to the conclusion that being too happy really upsets some people. ::

Sure, the news is welcomed, but let's not forget the context that this good news come in, which is very, very bad news. We have lack of investment in infrastructure and housing. Council and health services are being cut. People's standard of living has dropped. While I'm pleased that some spreadsheet at the Bank of England is showing some good news, at the end of the day, it's just a spreadsheet, the numbers by themselves do not mean anything. Meanwhile in the real world outside of think tanks and the tory spin machine, I don't feel better off than I was four years ago.

A few facts the Tories and their cronies don't mention

1 cost of VAT up
2 cost of heating up
3 cost of fuel up
4 cost of rail fares up
5 cost of everything up because of number 1

Massive tax breaks to millionaires and for me no pay increase since September 2010.

In the world of think tanks lies and balance sheets the recovery is complete.

Totally agree Stigofthedump, the use of think-tanks, both left and right, has unfortunately become an easy conduit for politically bias data. If journalists use think-tank data, it's only fair to the reader to indicate, the name of the think tank, and their backers. I mean it can be extremely confusing for the public. I don't think there is anything positive here? and the reason why is that we have been told this I don't know how many times and then only to be told by the Bank of England that we still have a long way to go and we are heading for further dips.

Absolutely agree with last two comments. On the news tonight it said that the Times Rich List will be out and there are more millionaires than ever and also super millionaires and some are British. So, the rich get richer and the poor get poorer. Where we live by the sea in East Anglia it is very apparent that the recession is still very much with us. Eating out is mostly weekends only, although coffee shops seem busy. Very little shopping going on and everyone is hoping for a booming summer season to boost business. So many people are constantly fundraising to make up for Government cuts everywhere and charity shops seem to be busy. Suffolk is in the middle of the Women's Cycle tour which everyone is hoping will attract people back to the English seaside as there was so much media coverage.
Recession over? - I think not.

I find it is better to put your nose out of the door to know what the weather is going to be. Same with the economy;
Look outside and see how many of your neighbours are in work.Look how many are cutting down. Small signs like the car hasn't been replaced as usual., they do not go out as much etc. I do not live in the Uk so I cannot put my nose out of the door there and can only accept what I read in the newspapers and the comments of course. If there was a real, sustainable recovery that was detectable by the good, honest, decent people of the UK you would get praise in abundance. Until that time the rich will just keep getting richer at the expense of the poor and vulnerable.

The recession was good for me!

No social concience then to make a comment like that Edna Bira. Lucky you. Of course there are always some that benefit from others distress.

oldun wrote:

No social concience then to make a comment like that Edna Bira. Lucky you. Of course there are always some that benefit from others distress.

Conscience doesn't come into it, i actually wrote quite a lot and deleted it all and just put what i did, much shorter and to the point. It wasn't intended to raise hackles just to point out that not everyone suffered in the recession and it's not just the "
rich getting richer"
etc etc, i have survived through 3 recessions now and could see the tell tale signs/writing on the wall long before this one happened and acted accordingly, suffice to say i haven't benefited from others distress either, whatever gave that impression?

Thats the trouble with the internet. Sometimes a post is read very literally and thus gives the wrong impression. I have also survived the recession (but for how long I wonder?) but have lost a lot of money on property in the process. Yes, many are surviving but thats not to say its not a worry because it could get worse before it gets better. Apparently, if interest rates rise (due to recession receding) many more will be pulled into the net of distress. Its not over till its over and politicians are busy juggling the figures with not a care for ordinary people trying their best to survive. Twas ever thus especially with elections looming. I take a much broader view of life in general not being one of the 'ME' generation.

oldun wrote:

Its not over till its over and politicians are busy juggling the figures with not a care for ordinary people trying their best to survive. Twas ever thus especially with elections looming.

It's always politicians that cause the recession in the first place and I was a victim of the recession in the late '80's under the Thatcher administration. Not her fault intirely of course, but government interference in interest rate changes didn't help one bit!!