The British economy has shown signs of recovery, and it is expected to get over the recession within the year but the rebound will be slow and weak.
Official figures showed last week that the number of jobless people in Britain has fallen for the first time since the spring of last year -- an unexpected evidence of labor market resilience in the worst recession in decades.
The Office of National Statistics said that 2.469 million people were out of work and seeking a job between June and August this year, slightly down from the period of May to July. This was the first fall in its quarterly unemployment rate since March-May period of 2008.
House price rose by 0.7 percent in September from the previous month, boosted by rising values at the top end of the market. It was the fourth consecutive month of increase, indicating that the housing market is getting back on the right track.
The boom in the stock market is another sign that the British economy is on the way to recovery. The benchmark FTSE 100 index closed at over 5190 points at the end of last Friday, about 20 percent higher than last summer when the global financial crisis first erupted.
Meanwhile, the U.S. Conference Board said earlier this month that the leading economic index for Britain, which forecasts economic performance in the coming three to six months, increased by 0.9 percent in August following a gain of 0.5 percent in July, the fifth consecutive monthly rise.
Therefore, many analysts have predicted the British economic recovery will start within the year and some even believed it had already started in the third quarter.
However, the country has to tackle problems such as weak household expenditure and soaring government debt before significant rebound could happen.
Household spending declined by 0.6 percent in the second quarter of this year compared with the previous quarter and dropped by 3.6 percent against the same period last year due to high jobless rate and low wage increases.
Soaring public debt is another headache for the British government and its fiscal deficit is expected to reach a record high of 175 billion pounds (285.4 billion U.S. dollars) at the end of this year.
The risk of deflation also pose a potential threat to sustainable economic recovery as inflation has been declining and gain of earning tumbled in the three month to August -- some analysts predicted Britain could face a deflation next year.