Hey recession –we can see your bottom!

It’s almost like believing in Father Christmas or the tooth fairies, we want to believe that the recession is bottoming out, but something in our sub-conscious tells us it can’t be real.

Admittedly, news that the first signs of growth in industrial output in more than a year did lead a well know research group to announce that we did see the recession’s bottom for the first time in March, and every month since then the gap has been increasingly widening.

And there are some facts to prove it. According to information provided by the National Institute for Economic and Social Research, the UK economy grew by 0.1 percent in May and by 0.2 percent in April, offsetting contractions of around 0.5 per cent in March.

Most significantly, there are lots of signs around that the UK services sector has begun to display signs of growth, which makes for significantly good news, on account of the fact that services account for around 75 percent of the UK economy.

Data from the manufacturing sector of UK industry is encouraging, with strong indications afoot that the second quarter of 2009 (April to June) is likely to see at least some stabilisation in gross domestic product, and possibly some growth. However industrialist have been heard already announcing their fears that any upturn in industrial production could be a bit of an Indian summer ( or spring) as the increase in demand is likely to ease off as spending in both the consumer and business sectors is far from strong.

These doubts were strengthened by the normally optimistic Chancellor of the Exchequer Alistair Darling who warned yesterday that Britain’s economic recovery could be held in the summer and autumn if oil prices continue their rise.

To be honest, Darling did predict in his Budget address, that any recovery in the UK economy would not begin until the fourth quarter of 2009, a prediction that many leading UK economists were inclined to agreed with.
In a speech yesterday, Darling announced that he was “confident as well as being cautious” over the prospects for the economy, but there are still pretty dark clouds hovering over the horizon.

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Tags: Alastair Darling, British Economy, Economics, Finance, Financial News, Recession