The UK economy has officially come out of recession, with new figures showing it started to grow in the last three months of last year.

However, the economy only just clawed its way out of the worst recession since records began, with painfully small growth of just 0.1%, figures from the Office for National Statistics (ONS) reveal.

That’s a far cry from the predicted 0.4%, although even that had been described as fragile recovery. In fact, it’s causing some commentators to worry that we’re heading for a so-called double-dip recession and could re-enter negative growth.

Germany, France, Japan and the US all began growing again last year, but the UK has trailed behind, making it one of the last major economies to exit recession.

The country plunged into official recession in the second quarter of 2008 and shrank by 6% over the 18 months. In 2009 alone, it slumped by 4.8%, which has been the biggest fall since the records began.

Warning note

It’s worth remembering that these figures from the ONS are estimates, made using around 40% of the data.

That means they could still be revised, with some analysts warning there may still be surprises ahead.

What does this mean for jobs?

Although the country has moved out of recession, this will not immediately restore the beleaguered jobs market. A report by the Chartered Institute of Personnel and Development (CIPD) showed that 1.3million people had lost their jobs since the start of the downturn.

Unemployment fell slightly in December but the Governor of the Bank of England, Mervyn King, has warned that the number of people out of work is likely to remain high for some time.

What’s happening to house prices?

There has been a gradual recovery in the housing market, with figures from Halifax showing house prices have increased by 9.4% since reaching a low in April last year. The average house price is £169,042 – £14,522 higher than April. However, that followes a decline of 23% between August 2007 and spring 2009.

According to the British Bankers’ Association, mortgage lending rose slightly in December, as homebuyers hurried to complete their sales before the stamp duty relief finished.

How about savings?

The historically low base rate has made the last 10 months difficult for savers, with many people having to accept far lower returns on their money.

Latest inflation figures show the consumer price index (CPI) rose from 1.9% in November to 2.9% in December.

On one hand, this is bad news for savers, as their money is worth less. However, this could mean the Bank of England considers raising the base rate sooner than it thought; meaning savings rates may start to rise.

It’s also worth considering that, while savings rates are low, the leading deals are paying significantly more than the 0.5% base rate.

For example, if you can afford to lock your money away for three years, ICICI Bank’s HiSave Fixed Rate Account is paying a market-leading 4.70%.

Even if you want easy access to your money, you can still earn far above base rate. The top rate on these accounts just now is 3.01%, although that is bolstered for 12 months by a 1.00% bonus, so after that you’d need to switch.

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