Yorkshire leading way as Britain finally struggles out of recession

Figures released yesterday revealed the Britain saw 0.1 per cent growth between October and December last year, ending a record six straight quarters of decline.

But the Office for National Statistics (ONS) figure fell far short of the 0.4 per cent expected and economists have warned the national picture remains fragile.

The chief economist at Yorkshire Bank, Tom Vosa, said the region was well placed to grow ahead of the rest of country as it was one of the first to go into recession and therefore one of the first to come out.

Mr Vosa said: "The regional economy looks to have been expanding quicker than the national economy.

"There is evidence that the Yorkshire economy is benefiting from tourism and also manufacturing growth for the first time after six quarters of decline.

"It is certainly in a relatively good position in comparison to other regions."

Mr Vosa said Yorkshire could also be slightly insulated from expected problems later in the year caused by public sector cuts, as there is a lower percentage of public sector staff among the region's population than in other areas.

Overall, the economy slumped 4.8 per cent last year – the biggest annual contraction since records began in 1949 – and it has lost six per cent since the recession began in 2008.

The UK's powerhouse services sector, which accounts for more than two-thirds of the economy, only managed 0.1 per cent growth in the fourth quarter, the ONS said.

The poorer than expected result was greeted with disappointment by experts.

IHS Global Insight economist Howard Archer said: "While the UK may be officially out of recession, it is far from out of the economic woods.

"Economic and financial conditions are still very challenging and the UK faces a tough job to build a decent recovery."

The UK is the last of the leading G7 nations to technically pull out of decline, although the fragile nature of the recovery will heighten fears of a "double-dip" recession with spending cuts and tax rises looming after the next General Election.

The pound dipped against the dollar and euro after the estimate was released as traders bet interest rates would have to be kept at record lows for longer to help motor the UK recovery.

Experts added the largest contribution to growth came from areas such as retail and the motor trade, which have been helped by temporary factors.

Regional Minister for Yorkshire Rosie Winterton welcomed the figures but warned the economy was still weak.

"We need to be aware, regionally and nationally, to have confidence with the recovery but also mindful of its fragility," she said. "We need to focus attention to give the assistance to those people and businesses that are still going to be in some difficulty."

The director of policy at Leeds, York and North Yorkshire Chamber of Commerce, Ian Williams, said: "Business confidence is beginning to return and the market is improving.

"The chamber's latest results also reported signs of growth in both the manufacturing and service sectors, however many feel that the recovery is fragile and as growth in the 4th quarter was only measured at 0.1 per cent, the chamber believes there is still a significant way to go before we see full economic recovery."

Shadow Chancellor George Osborne called for a "new model of economic growth" under a Tory government and said: "Let's be clear – this is about as weak growth as you can get."

He said the figures had shown up as "nonsense" claims by Prime Minister Gordon Brown the UK was better prepared than other nations to tackle recession.

Liberal Democrat Treasury spokesman Vince Cable said: "With both the construction and banking sectors in trouble, we are not out of the woods yet."