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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. ::

itchyfeet wrote:

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!!

You have got to blame somebody, so why not the politicians . I was also a victim of the the 80's recession, but I am still here to tell the tale
Thank goodness

Yes willow, surviving is the game and to respond to difficulties in times of need.