Page last updated at 19:18 GMT, Wednesday, 9 September 2009 20:18 UK

Signs recession over - Mandelson

Lord Mandelson and Wen Jiabao
Lord Mandelson held talks with Chinese premier Wen Jiabao

Business Secretary Lord Mandelson has said there are "signs" the UK economy is coming out of recession.

The comments come as surveys suggest consumer confidence is increasing and the decline in the jobs market is levelling off.

But Lord Mandelson warned on BBC Radio 4's World at One "there is always a risk of a second recessionary dip".

He added that it was important the government's "measures are continued and not withdrawn prematurely".

However, he said ministers were not considering an extension to the car scrappage scheme, despite pressure to do so from motor manufacturers.

Under the system, owners of cars and vans more than 10 years old can get £2,000 towards a new one.

It was introduced four months ago and will end when the money allocated - £300m - runs out.

Manufacturing growth

On Tuesday the National Institute of Economic and Social Research said it believed there had been a return to UK economic growth in the three months to July.

Official manufacturing figures suggested the sector had shown its strongest growth in more than three years during July.

Meanwhile, research from Markit Economics found "marginal increases" in both permanent and temporary job appointments in August.

Speaking on a trip to China, where he met premier Wen Jiabao, Lord Mandelson told The World at One: "I think the signs are that it is (coming out of recession), but there is always a risk of a second recessionary dip.

"Given that risk, we have to be sure that the measures and interventions that we are undertaking at the moment are continued and not withdrawn prematurely.

"This might not only risk triggering that dip but, if we were to go into that dip, it would make it harder to get out of."

'Unaffordable'

His comments follow Conservative criticisms that Labour's economic stimulus package is increasing an already enormous level of government debt.

Opposition leader David Cameron called Labour's plans "unaffordable".

Chancellor Alistair Darling has estimated the spending deficit will reach £175bn this year, but the government has said it intends to halve this within four years of growth returning.

Asked whether the UK economy was beginning to experience "green shoots of recovery", Lord Mandelson said: "I'm not going to use that phrase."

But he added: "It does seem the measures we've taken as a government and those measures taken internationally are having a positive effect."

In total, contracts and new investment deals between the UK and China worth more than £302m have been agreed during Lord Mandelson's trip.

This includes low-carbon deals worth more than £50m.

Lord Mandelson's visit to China lasts until Thursday.



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