Is the UK coming out of recession?

Shops across the UK have closed down because of the recession

Glasgow, like many cities across Britain, has had a tough last 12 months.

Wander through the main shopping streets here and more than one in 10 stores is boarded up.

Unemployment in some parts of the city is running at 15%, twice the national average.

The number of young people without a job is even higher.

"It's still hard here," said 21-year-old Helen.

"Where I live, all the local shops have shut down because they can't keep the business running. I find it really hard to get the things I need for my two boys."

But after a year of factory closures, job losses and doom and gloom, there are signs things are starting to recover.

Figures out later this year will probably show the UK is already out of recession and starting to grow again, although at a slow rate.

'End' of recession

At Rhythm Base drum store in the centre of Glasgow boss Paul Burke says business started to pick up around May or June.

Paul Burke's drum shop has seen trade pick up in the last few months

"People were just not spending the money earlier this year," he told Newsbeat.

"But over the summer there was a sudden change. There has been more people through the door and more online spending as well.

"I am a lot more optimistic. I think it's really going to kick on now for the Christmas period and get us through the recession by the start of the new year."

That kind of optimism is shared by economists working for big investment banks in London.

"It's early days but there is growing evidence that the worst is now behind us," said Janet Henry, head of European economics at HSBC.

"We're already seeing an improvement in the housing market and in manufacturing. But a lot of people on the street might not be feeling it and unemployment is likely to head higher for some time."

Economists say record low interest rates are now starting to have an effect on both the housing market and consumer spending.

Most home owners are paying less in mortgage payments now than they were a couple of years ago.

Rates are expected to stay at just 0.5% until at least mid-2010, encouraging people to borrow and spend.

A cut in VAT at the start of the year and a scheme to switch old bangers for new cars has also helped boost spending.

The Nissan factory in Sunderland and the Mini plant in Oxford have both taken on extra staff over the summer to cope with increased demand for cars.

'Weak' recovery

But although we might officially be coming out of the recession, nobody really expects the economy to start booming any time soon.

Despite talk of recovery, the jobless figure is likely to rise for the time being

The main problem is unemployment. The number of people losing their jobs is likely to keep going up for at least the next six months as nervous firms tighten their belts.

The government has borrowed heavily to try and cushion the impact of the recession.

That means it will either have to raise taxes or cut spending over the next couple of years to balance the books.

Economists say that all means any recovery is likely to be jittery and uncertain.

"The upturn has probably started and we could see a relatively strong bounce back," said David Kern, the chief economist at the BCC, which represents thousands of medium-sized firms in the UK.

"But sustaining the recovery will be very challenging and the risks of a relapse are high."