UK in longest recession on record

23 October 2009 11:48 am | By Lee Jones

GDP has now been contracting for six consecutive quarters, the longest contraction since 1955, according to the Office of National Statistics. It says GDP decreased 5.2 per cent over the last 12 months.

The decline in output was due to decreases in all component aggregate series - output of the service industries decreased 0.2 per cent, output in the production industries decreased 0.7 per cent.

Yesterday, a Reuters survey amongst economists found that, on average, they thought GDP would rise by 0.2 per cent today, pulling the UK out of the recession. 

France, Germany and Japan have all recorded positive GDPs and have all technically come out of their own recessions. The ONS says this result is only the first estimate and may be revised in time.

City Index market analyst Nick Serff says: “Sterling took a hit on currency markets after this news, dropping over 1 per cent against the Dollar after being up on the day.

“Investors continue to hold onto their long positions across all the main indexes with some adding to positions on yesterdays dip below 5200. With UK GDP numbers disappointing, stock markets could be in for a volatile end to the week.”

Mortgages for Business managing director David Whittaker says: “This is just goes to show why people shouldn’t get carried away with rising house prices.  Yes, prices are on the up, but overall unemployment is going to continue to rise – 2.5 million is just the beginning.”

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