A respected economic research body has predicted that the recession has come to an end in the UK.
The National Institute of Economic and Social Research (NIESR), which has a solid track record of predicting monthly fluctuations in GDP, believes that the economy grew in April and May.
Speaking to the BBC this morning, Martin Weale, director of NIESR, said he “expects the official figures to show either that the recession is over or that it is close to over” in the second (current) quarter of 2009.
NIESR said: “The monthly profile points to March as having been the trough of the depression, with output rising in April and May.
“The monthly figures are inevitably erratic but the picture is coherent with the broader picture of stabilisation which has emerged since we first suggested that output had stopped falling in May.”
Official figures for GDP in April, May and June, which will confirm NIESR’s prediction, will not be released until the end of July.
Meanwhile, figures from the Office for National Statistics (ONS) released yesterday showed that manufacturing output unexpectedly rose in April. Industrial output grew by 0.3%, marking the first monthly increase since February 2008.
However, Lee Hopley, head of economic policy at manufacturing body the EEF, warned that the sector remained in jeopardy.
He said: "Manufacturing has stabilised and all the indications are that we have passed through the worst phase of the recession. However, conditions remain patchy and it remains far too early to begin talking of a sustained recovery.
"While the cheaper pound will make our exports more competitive, manufacturers are increasingly concerned by its volatility, while a sustained rise in oil prices will eat into margins and reduce the purchasing power of its customers."
© Crimson Business Ltd. 2009