After almost two years of consecutive contraction, data released by the Office for National Statistics, confirmed that the UK economy had finally begun to expand.

But the 0.1 per cent growth in Gross Domestic Product (GDP) was much smaller than the 0.4 per cent widely expected, fuelling fears that a further "double dip" slip back into recession could be around the corner.

The Government seized on the figures as evidence that its economic policies were beginning to take effect, but analysts warned that signs of a long term recovery were far from certain.

A Treasury spokesman said: "The Chancellor has always said that the economy would return to growth by the turn of the year, and today's estimate of 0.1 per cent growth in the fourth quarter bears that judgment out.

"What this estimate makes clear is that the Government is right to be confident but cautious about the prospects for the economy and that it is right that we keep supporting the economy.

"Withdrawing the support that has helped us get to this point would put the recovery at risk."

The UK was one of the last remaining major economies still in recession after the US, France and Germany all emerged from their slumps last summer.

But Jonathan Loynes, an analyst at Capital Economics, said today's figures were "a major blow" to hopes that the UK economy had emerged decisively from recession.

He added: "With household incomes under pressure, credit in short supply and a major fiscal squeeze looming, the path to a full recovery is going to be a long and bumpy one.

"We still expect average GDP growth of a below-consensus 1 per cent or so in 2010."

IHS Global Insight economist Howard Archer said: "While the UK may be officially out of recession, it is far from out of the economic woods.

"Economic and financial conditions are still very challenging and the UK faces a tough job to build a decent recovery."

The UK's economic slide began in the second quarter of 2008 and has contracted by a record 6 per cent since then.

A return to growth had been tipped for the third quarter of 2009, but the recovery never came, with a further 0.4 per cent contraction taking place instead.

Today's figures will do little to convince economists that a full recovery is on its way.

With public borrowing having ballooned to to an estimated £178 billion and many British workers remaining fearful of their jobs, consumer confidence remains extremely frail.

Liberal Democrat economic spokesman Vince Cable warned that the economy remained "fragile".

He told GMTV: "The British economy has had the economic equivalent of a heart attack. It is still fragile. It is still dependent on artificial money creation, on enormous government deficit, the banks are still not working properly.

"All these things are going to have to be sorted out before we can talk about any kind of meaningful recovery."

Stephen Gifford, chief economist at Grant Thornton said the figures were far from a resounding vote of confidence in the economy.

He said: "The last six quarters of economic contraction has left an economic scar on the UK and the journey to trend growth will be slow and patchy. But there are some reasons to be optimistic, with unemployment beginning to decline, consumer confidence rising and markedly lower reports of home repossessions."

But he added: "The real worry will be the impact on confidence from the pending tax increases and spending cuts. It is certain that unprecedented cuts and rises will be needed if the record deficit is to be reduced. But this future burden will hit all households and businesses hard."

For the full story visit  www.telegraph.co.uk

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