Calling the economic downturn a full-blown "depression," the the National Institute of Economic and Social Research (NIESR) said that the British economy shrunk by a whopping 4.8 pe cent in 2009, the sharpest fall in the last nine decades.
The GDP however rallied in the last quarter of the year and expanded by a modest 0.3 percent, compared to a 0.2 per cent fall in the third quarter. The rise comes after six consecutive quarters of contraction.
This makes Britain the last major economy of the world to have emerged out of the recession.
British economy has lost 6 percent of GDP since March 2008. The recovery recorded by NIESR is the first-ever since then.
According to the Institute, output fell sharply for 12 months until March 2009. The picture has not changed much since then, although evidence of a recovery is now starting to emerge.
Despite the slight improvement in GDP growth, NIESR says the recovery will necessarily be a slow and labourious one. It anticipates that the first quarter of 2010 will be weaker because of the VAT rise.