NIESR sees end to recession

Date: 9th September 2009

The National Institute for Economic and Social Research (NIESR) has announced that the recession in the UK has come to an end.

According to the experts, GDP grew by 0.2 per cent over the last three months (June-August), driven by a stronger 0.9 per cent rise in the manufacturing sector.

Latest official data from the government showed that the UK economy shrank by 0.3 per cent over the second quarter of the year (April-June).

However, a range of stimulus moves from the authorities, including the reduction of the Bank of England rate to 0.5 per cent, appear to have checked the downturn.

The pound is also much weaker than it was last year, boosting the export prospects of partnerships, business start-ups and other smaller firms.

Sterling stood at over $2 against the dollar last summer, but is currently at just $1.65.

NIESR warned that GDP growth could remain "stagnant" over the months to come, as the effects of the financial crisis continue to weigh on economies.

The report added: "This is the first time our GDP indicator has been higher over a three-month average since May of 2008 and reinforces our view that the recession ended in May of this year."

Organisations including the International Monetary Fund believe that the UK economy is on course to shrink by around four per cent over the calendar year 2009.