Emergency interest rates look set to continue amid weak recovery.
The UK emerged from recession in the fourth quarter of 2009, but growth was an anaemic 0.1 percent over the third quarter, worse than the most pessimistic analyst forecasts.
Simon Hayes, chief UK economist at Barclays Capital, and a former official at the Bank of England called the result “clearly disappointing” in an interview with Bloomberg.
The value of the pound fell by 0.4 percent on the news, making dollar valued commodities such as gold and silver more expensive to UK manufacturers.
With the recession officially over, the full extent of the downturn can now be calculated. It lasted six consecutive quarters, the longest recession on record. GDP dropped by 6 percent during the period, and a record 4.8 percent in 2009 the steepest decline since records began.
The weakness of the recovery makes it unlikely that emergency measures designed to support the economy through the recession are likely to stay in place.
Record low interest rates have put money into the pockets of most households that are paying mortgages – which supported retail sales in the run up to Christmas – and these rates look set to continue.
Bank of England Governor Mervyn King said last week the UK faces a long period of healing.”At this very early stage of the recovery, it is particularly difficult to judge the medium-term prospects for the economy,” he added.