A key estimate of UK GDP suggests output increased in the three months ending in January, but indications of a more substantial recovery are still wide of the mark, according to the National Institute of Economic and Social Research (NIESR).
The NIESR's monthly estimates, which historically produce accurate forecasts compared with the final ONS figures, suggest output grew by 0.4% in the three months ending January, following on from a 0.1% growth in the three months ending December.
But it adds the improvement is more a consequence of the fact output in October was unusually weak, rather than a clear indication a significant recovery is underway.
The NIESR says it interprets the term ‘recession' to mean a period when output is falling or receding, while ‘depression' refers to a period when output is depressed below its previous peak.
It concludes unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. It says it does not expect output to pass its peak at the start of 2008 until Q4 2012.
ONS data released last month showed GDP grew by 0.1% in Q4 2009, compared with a fall of 0.2% showed in Q3 but significantly lower than the 0.4% expansion predicted by many experts.
Overall, it said the economy shrank by 4.8% last year - the most dramatic contraction since records began in 1949 - and has declined by 6% since the recession took its grip in 2008.
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