January 26, 2010 |
|Britain emerged from the longest recession in modern history today, but the economy grew by only 0.1 per cent between October and December, far below expectations of a 0.4 per cent rebound.|
The minimal growth in gross domestic product (GDP) means that the Government will have to battle even harder to sustain the recovery.
Also, figures today from the Office for National Statistics (ONS) are the first estimate on economic growth in the fourth quarter and could be revised up or down in the next reading.
In 2009 as a whole, the economy fell by more than 4.8 per cent, the fastest pace of decline in a single year for 88 years, and more than in any other 12-month period since the Great Depression of the 1930s.
Britain is the last major economy to emerge from a full-blown downturn after the United States, Japan, China, Germany and France all climbed out of recession in the third quarter, between July and September, last year.
America will reveal whether it has sustained its recovery when it releases fourth-quarter GDP figures this week.
Gordon Brown warned yesterday that the country was still in danger of tumbling back into recession, if a Conservative government prematurely withdrew the economic stimulus.
He said: “Policymakers in the United Kingdom must remain vigilant. That is why we are all agreed around the world that we must reduce our deficits steadily, according to a plan, but that we must do nothing this year which would put recovery, growth and jobs at risk.
“The biggest mistake we in Britain and individual countries could make would be to withdraw now from the supportive actions we need for growth and jobs.”
Mr Cameron, who has promised to hold an emergency Budget if the Tories are elected, said that it was time for Labour to “do the right thing”, and accused the Government of "moral cowardice" in failing to deal with the country's budget deficit.
“Our recession, the great recession, is the longest and deepest since the war and coming out of recession does not mean that our debt crisis is over,” he said.
“In fact, far from it: Labour’s debt crisis is now the biggest threat to our recovery, so we will only get this recovery right if we start right now on a proper debt reduction plan.”
He added: “The Government’s promise to halve the deficit in four years has, frankly, failed to convince those who we need to have confidence in Britain’s economic future.”
In a reference to George Osborne’s proposal to cut tax credits and Child Trust Funds for the middle classes, Mr Cameron spoke of the need for action to show they were serious in intent.
“That means some reduction in public spending plans in this coming financial year,” he said.