UK Economic Depression To Be Declared 'Over'

By Ed Conway, Economics Editor

The longest economic depression in British history will be declared over today, with the Office for National Statistics expected to confirm that the recovery is strengthening.

The ONS is expected to report that the economy grew by around 0.8% or 0.9% in the second quarter of the year.

George Osborne has been boosted by recent figures on growth

The increase in gross domestic product (GDP) will mean that the economy finally surpasses the size it was at the beginning of the recession in 2008.

The news will come as an added bonus for the Chancellor, who yesterday celebrated as the International Monetary Fund (IMF) upgraded Britain's growth forecast for this year and the next.

The IMF also said that UK growth this year will be stronger than in any other major economy.

However, this strong growth belies the fact that Britain's depression - the period for which GDP is below the pre-crisis peak - lasted longer than any other G7 economy.

But while there are concerns about the nature of recent economic growth in the UK and the possibility of a housing bubble in London, George Osborne is likely to emphasise the fact that all major sectors of the economy have been growing recently.

The Chancellor is currently on a tour of northern cities to underline the efforts the Government is taking to attempt to narrow Britain's regional economic divide.

Although overall GDP is back at pre-crisis levels, the natural increase in the population since 2008 means that GDP per capita remains around 6% lower than before the recession.

This, in turn, has contributed to lower wages and the squeeze on incomes felt in recent years.

Economists have also warned that while the services sector is bigger than before the crisis, the manufacturing and construction sectors are significantly smaller.

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