Think-tank says recession over

The NIESR, a well-known and independent economic commentator, is reporting that April and May saw growth levels in the UK of 0.2 per cent and 0.1 per cent respectively. That would mark an end to the year-long recession and give the lie to worries over the slump worsening.

Ray Barrell, the institute’s director of forecasting, said that "the evidence from the last few months is that we may well have reached the bottom of the depression".

The figures were just the latest to suggest that a recovery is underway in the UK, with the Office for National Statistics announcing that manufacturing output rose 0.2 per cent in March, marking an improvement for the second month in a row, and analysts forecasting growth too in second-quarter gross domestic product.

Britain entered recession in mid-2008, with the economy deteriorating in the fourth quarter of the year and the first three months of 2009. However now surveys have begun to show signs of an improvement as the service sector picks up along with house prices.

Yesterday the markets responded to the news positively. The FTSE 100 rallied for the first time in three days and sterling gained against the dollar. The government is also likely to be a beneficiary of the good news, with the improvement seen by many as a vindication of their monetary policies during the downturn.

WHAT THEY ARE SAYING:Bank of England Monetary Policy Committee member Kate Barker in the Leicester Mercury: "I think there's a lot of concern about what's going to happen beyond this pick-up. The really important question is (whether) there's a pickup in the economy and if people can sustain that so it continues on to autumn… Some areas of retailing are still doing reasonably well and manufacturing orders are starting to come back, but whether that's a stocking issue or a turn-up in final demand isn't so clear."

Alan Clarke, economist with BNP Paribas, in the Guardian: "We are accumulating more and more evidence that the recession is over. This report from NIESR provides more confirmation that recession is over. To be clear, we are not heading for a boom. The economy is still likely to grow much slower than potential, in turn meaning that unemployment will continue to rise. The point is the economy is no longer shrinking." ·