Britains mercantile expansion revised up to 0.4%

Gary Parkinson and Grainne Gilmore & ,}

The UK emerged from the 18-month retrogression at the finish of last year some-more strongly than formerly thought.

In the third guess of GDP expansion the Office for National Statistics pronounced today that the economy grew by 0.4 per cent in between Oct and December, unexpectedly light the prior guess of expansion of 0.3 per cent and beating the expectations of economists that the figure would be unchanged.

The ONS had creatively estimated 0.1 per cent growth. It pronounced that the second rider was shabby by stronger outlay from the building a whole and use industries and from agriculture.

The economy still shrank by a jot down 4.9 per cent last year, the ONS said, and the tumble in outlay during the retrogression remained at 6.2 per cent, the biggest given allied annals began.

Related LinksCOMMENT: Riding but stabilisers1.8 million watch Ask the Chancellors UK liberation gains traction on services boost

Economists pronounced that concerns remained about the infirmity of the economy, despite the revised figures. They warned that the expansion was increased by government spending that will decrease as the nation tackles the debt crisis. Activity had additionally been bolstered by the register cycle companies who ran down their bonds during the tallness of the retrogression and had proposed to sequence some-more products but that this was is a proxy effect.

Speaking to MPs this sunrise Alistair Darling took a little of the credit for the stronger than approaching figure but concurred that the economy was operating with impulse measures.

Its scold that a little of the impulse not each measure, but a little of the measures that I voiced in Nov 2008 at the pre-Budget inform are being withdrawn," he said. "The greatest singular impulse was a VAT cut. And I said categorically that was going to run for thirteen months and I hold that my decision was right. Part of the [upward revision] was due to the actuality that expenditure was brought brazen in to 2009, that is what I longed for to do. Had that run on serve than that, not usually would have there been a loss to the revenues, but it wouldnt have had the same effect."

Charles Davis, comparison economist at the Centre for Economics and Business Research, said: "There are still concerns on the sustainability of the recovery as expansion was mostly driven by consumer and supervision spending as well as the register cycle factors that are expected to wear off by 2010. "

Howard Archer, arch UK and European economist at IHS Global Insight, said: "[The upward revision] does not essentially change the perspective that liberation is likely to be rough and gradual.

"Significantly, the economy was reception a lot of assistance in the fourth quarter of 2009 from financial and mercantile impulse and these props are starting to be removed. Growth might well have moderated in the initial entertain of 2010 due to the poignant weather-related strike to wake up at the begin of the year."

Economists additionally refused to order out the possibility of a double-dip recession.

Ross Walker, an economist at RBS, said: The risks of a stand in drop are sincerely modest, but I think there are still a little poignant headwinds."

The ONS will tell the initial guess of GDP expansion in the initial entertain of this year on Apr 23, only weeks prior to the expected choosing date of May 6.