UK to see positive economic growth in Q1 2010

By Trevor Williams, Chief Economist

UK economic growth revised up in Q4 In this weekly, we focus on the recent trends in UK GDP and the prospects for growth in Q1 2010. Paradoxically, the upward revision to UK GDP growth in Q4 of 2009, to 0.4% from 0.3%, also saw a downward revision to growth in earlier years.

Hence, the peak to trough fall in UK gdp during the recession just ended is 6.3%, down from 6.2% in the previous release of the data.

For 2009 as a whole, there was a fall of 4.9% in GDP, the biggest fall in any single year since the
figures have been recorded on this basis.

Moreover, the UK’s recovery from recession has been slower and the downturn deeper than that of the average of the G7 economies. UK economic growth fell for six consecutive quarters, from Q2 2008 to Q3 2009, whilst the average fall in the other G7 countries was four consecutive quarters.

...but earlier figures were revised lower, meaning the recession was even deeper than first thought...
We have identified the high degree of leverage in the UK as one of the reasons why the UK’s recovery has taken longer than in some other economies.

Another reason, is the high share of the economy accounted for by services, which fell sharply in the recession. Given that the downturn was exacerbated by a global financial crisis, one of the features of the recession of 2008/2009 is that services output has contracted more than any other sector.

Read more (PDF, 232 kB)

* All charts are sourced to Lloyds TSB Corporate Markets Economic Research, Bloomberg, IMF and Datastream

 


What do you think?

We are interested to hear your thoughts.

We do not publish email address information, this is only to confirm and validate your comments.





Your comments

We are not able to publish all comments submitted. All comments pass through a human review process before being published online.