UK economy contracting at 'slower pace'

Wednesday 25th November 2009

The UK economy is contracting at a slower place than had previously been predicted in the third quarter of this year.

Data this morning from the Office of National Statistics (ONS) showed the economy shrank by just 0.3 per cent in the three months through September, an upward revision of 0.1 per cent from the 0.4 per cent forecast contraction.

Although the news was a surprise to many analysts, it bolstered views the UK could exit recession in the final quarter of this year.

Today's figures mean the economy has contracted for six consecutive quarters - the longest constant expanse of declines since records began in 1955. France, Germany Japan and the US have all already exited recession since the global financial crisis hit.

Duncan Higgins, senior analyst at Caxton FX said: "Though the UK economy is yet to return to growth, trailing behind the other G7 nations, today's data is encouraging for Britain's recovery prospects.

"Concern is lingering that the Bank of England has yet to close the book on quantitative easing. However, with first-tier data starting to pick up, we may see some tentatively upbeat comments concerning the end of stimulus measures as we head into the new year."

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