The financial crisis that emerged from sub prime-mortgage crisis in 2007 in the United States transformed into a global recession. The financial and economic activities of about all the countries have been severely affected by this sub prime-mortgage crisis. The industrialised economies have been hit hard in this crisis. The UK economy underwent the impact of this crisis in the second quarter of 2008. During this period, UK faced the largest contraction in economy on record. However, the latest statistics of UK are predicting that era of soaring borrowing and economic downturn is over.
At the end of year 2008, British economy could not come out of recession, showing the lagging position of economy and everyone was afraid of the potential relapse in the following year. Although the recession emerged from sub-mortgage crisis in the United States, however, UK economy was at disadvantage because it was highly dependent on the financial sector. The poor performance of UK financial sector along with the increasing levels of consumers debt, were keeping the state at a lag behind the other industrialised states, thereby, preventing UK economy to recover from global recession.
The official statistics that have been published in January 2010 reveal that British economy is out of recession. While we cannot answer this question exactly, unless there have been some visible trends in the economic conditions.
Before analysing whether UK is out of recession or not, looking into what has happened to UK during the last few years (particularly before recession) will be very significant. During the last ten years, the investment and growth in UK has remained passive however, the economy has faced high levels of FDI. The financial sector has become stronger both domestically and internationally whereas; the manufacturing sector has gone down. Moreover, the growth of financial