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Economists split over whether recession has already ended

Source: The Guardian

Nov 08, 2009

Summary

Analysts sharply divided over ONS data on economy

Mervyn King will reveal the Bank of England's forecasts for the crucial pre-election period this week, amid a furious row among some of Britain's most prominent economists about whether the recession is already over.

With the poll due by June at the latest, Alistair Darling is hoping recovery will be under way by the end of this year, bringing the feelgood factor back to beleaguered British voters. But economists are sharply divided over whether the downturn will get worse still.

Many City number-crunchers were caught off guard by the 0.4% contraction in the economy in the third quarter, after business surveys had suggested firms were feeling more upbeat.

Led by blue chip investment bank Goldman Sachs, they have been rubbishing the official figures since they were announced last month, insisting recovery started in the autumn, and the downturn will be wiped away when updated figures are announced. Goldman analysts said the data, collected by the Office for National Statistics, was: "Unbelievable. Literally."

Even t

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