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Page last updated at 09:14 GMT, Friday, 10 July 2009 10:14 UK

Adam Shaw

Ironically, it's not the bad news that's so depressing, it's the hope.

Last month the respected think-tank the National Institute for Economic and Social Research (NIESR) said the economy began to grow again in April. But now it's changed it's mind.

The hope of a recovery lasted all of one month and the NIESR has now dashed those hopes.

Graph representing 12 month decline of the FTSE 100 share index
Predictions of the end of the recession have been increasing in recent weeks

The think tank revised down its forecasts for growth, emphasising that volatility persists and there is no guarantee that the recovery will be strong or sustained.

The change of mind followed a bigger than expected downward revision of official first-quarter gross domestic data and worse than expected industrial output figures for May.

Martin Weale, NIESR's director, said that "revisions to the official estimates of economic growth in the first quarter of 2009 suggest that March can no longer be considered the trough of the recession."

"However, it remains our view that the UK economy is now stagnating rather than continuing to contract at a sharp pace."

I suppose the question is - has the economy changed direction or are these just natural eddies of economic current which are running in different directions and of which we shouldn't take too much notice?

It certainly emphasises the dangers of looking at figures for any one month in isolation and drawing too much of a conclusion from them.

There is an old joke which says that an optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.

As economists predict the end of this year may well see the end of this recession I make one fairly confident prediction of my own. There will be plenty of people staying up on December 31st To make sure they see the back of 2009.

Business round-up with Adam Shaw
Friday, 3 July 2009, 09:30 GMT |  Today



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