UK may celebrate the end of recession?

As Confederation of British Industry announced on Monday, United Kingdom managed to get trough the deepest collapse, though the country will completely recover only by the spring of the next year, reported The Times.

CBI anticipates the speed of economic decline to reduce in the second half of 2009, while the first quarter revealed quicker worsening than it was expected. The Ernst & Young ITEM club also predicts a recovery by spring 2010, though it stated there would be a hard way as unemployment digits have already exceeded 3 million. The CBI also predicts the number of unemployment people to peak at 3.25 million in 2010. 

Nevertheless, the group forecasts the process of recovery to be “slow and fragile” with growth in GDP renewing in spring of 2010. The CBI revised its GDP growth forecasts for 2009 from -3.3% to 3.9% which reflects worse than expected restrictions of -1.8% for the first quarter of 2009.

It expects that aggressive monetary policy, a weaker pound, low inflation and fiscal support packages will combine to help the rate of UK GDP decline slow through 2009 and make a fragile improvement to reach quarter-on-quarter growth of 0.2 per cent in April to June 2010.

The Times notes: “There is also some comfort in its prediction that the economy will have shrunk by a total of 5.1 per cent by the end of this recession, less than the cumulative 5.9 per cent seen in the early 1980s recession.”

The average UK consumer is expected to continue to cut back on spending, with household consumption forecast to drop by 3.4% in 2009 and 0.4% in 2010 as low inflation and job worries keep average earnings growth weak throughout 2009. The Ernst & Young ITEM club sees the consumption to lose almost 4% as people become more concerned about savings.