Defaqto calls for calm over 'green shoots' hopes

The end of the recession in the UK economy will not mean a return to impressive rates of growth, a Defaqto expert said today.

According to economist Michael Baxter, the current ’exuberance’ surrounding reports of green shoots of recovery is giving people a false impression.

Britain has been in recession since late 2008, with GDP contracting by 0.8 per cent over the second quarter of the year.

However, more recently there have been more positive reports, with lenders Halifax and Nationwide saying that house prices had risen over the summer.

Service sector figures for July released earlier this week also revealed positive growth, while the FTSE 100 is up by over 30 per cent since March.

Mr Baxter commented: ’I don’t know about a double dip, it is possible but I think some of the talk of green shoots over the last few months have been a little exaggerated; the stock market’s performance has exaggerated things.

’People have let all this good news run away with itself a little bit … I am not saying we are going to have another recession but we are not going to have a boom like we had a few years ago.’

The Paris-based Organisation for Economic Co-operation and Development said yesterday that the UK’s economy would shrink by 4.7 per cent over 2009.

Government forecasts suggest a gentler fall of 3.5 per cent.ADNFCR-2318-ID-19346628-ADNFCR