The recovery is losing some momentum, but the National Institute for Economic and Social Research, the nation's oldest and most respected economic think-tank, says that the recession is "over", adding that the "UK economy's strong performance over the past seven months does not suggest a further round of quantitative easing is currently necessary".
The NIESR, which enjoys an enviable record for predicting movements in GDP, estimates that growth in the three months to October was 0.5 per cent, a decoration of the 0.8 per cent officially recorded by the ONS in the quarter ended September but still more robust than most expectations.
In October the UK economy returned to a level last seen at the end of 2008. However, this still leaves the economy 3.6 per cent below its pre-recession peak, in March 2008.
As the Bank of England publishes its latest Inflation Report today, its definitive view of the economy, the latest UK trade data suggested that the export-led revival and rebalancing of the economy is yet to arrive in earnest. The Office for National Statistics said that the deficit on trade in goods and services narrowed by £300mn in September, to £4.6bn, helped by a better performance in the aerospace and chemicals sectors.
As David Cameron leads the most substantial trade delegation ever to China, the ONS confirmed that British exports to China also enjoyed a record rise of £108m in September, to £735mn. China now ranks above Italy and Sweden as an export destination, but still lags the US, Germany, France and Ireland. But imports from China, our second biggest source after Germany, were £2.6bn, up £26mn on the month. The three-month data, though skewed by some unusual movements in oil and aircraft trade, represented the worst trade deficit for any quarter since ONS records began - £25.2bn, some £2bn worse than the second quarter.
Some detail on what has driven industrial growth recently was also filled in by the ONS; manufacturing growth of 1 per cent in the third quarter was driven by the food, drink and tobacco industries, up 2.3 per cent in the three months, and also by metals and metal products. The car industry, by contrast, saw a 3.7 per cent decline.
The NIESR added: "Unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2012". The National Institute defines "recession" to mean a period when output is falling or receding, while "depression" is a period when output is depressed below its previous peak.