LONDON BRIEFING:THERE WERE no cheers or high fives in the City of London yesterday to greet news of Britain's official exit from recession; it was more a sharp intake of collective breath and muffled expletives, writes FIONA WALSH

Instead of the heartening tale of economic recovery that had been so confidently predicted by the Square Mile’s number-crunchers, the eagerly awaited GDP data showed a shockingly small rebound over the final quarter of 2009.

At 0.1 per cent for the three months to end December, the return to growth was enough – just – to declare an end to the recession but it was hardly a convincing recovery after the longest and deepest downturn since the 1930s. Given the massive stimulus to the economy over the past year, it could barely be counted a recovery at all.

Expectations had been high ahead of the announcement yesterday morning, reinforced by the Office for National Statistics’ unusual decision to announce the data “live” in a televised press conference in Westminster. The sense of theatre was heightened as the normally faceless government statisticians embarked on a New Year’s Eve-style countdown to the 9.30am announcement.

City economists were appalled by the data – and not just because they all got it wrong once again. The average forecast this time was for GDP growth of 0.4 per cent in the final quarter, but then these came from the same economists who last October were equally confident in predicting the recession had come to a convincing end in third quarter, only to see a shock 0.4 per cent contraction.

One leading forecaster, Howard Archer of IHS Global Insight, narrowly escaped a self-imposed career change: so confident was he in his prediction of growth, he pledged to abandon economics if proved wrong again this time. A narrow escape indeed, particularly as the range of opportunities available to an ex-economist must be shrinking by the day.

Although Archer and his fellow economists were swift to point out yesterday that initial estimates of GDP are almost always revised, there was a real sense of shock as economists realised just how close we had come to clocking up another quarter of negative data.

With a record six consecutive quarters of contraction under its tightened belt, Britain is already the last of the G20 nations to emerge from the downturn. Now the paltry fourth quarter growth figure raises fresh questions over the pace of the eventual recovery.

Quite where the economy would have been without the massive stimulus provided by the Bank of England’s £200 billion quantitative easing programme and the government’s £12 billion VAT reduction and car scrappage scheme is anyone’s guess. And there’s clearly little point in asking the economists.

Growth in both the manufacturing sector and services was 0.1 per cent but there were distinct variations behind the headline data.

The retail and motor trades sector enjoyed a strong quarter, for example, helped by the cash-for-clunkers scheme. But within the services sector, hotels and restaurants were notably weak, showing a drop of 6 per cent year on year. The government did its bit for recovery, with the public sector up by 0.2 per cent, but there was no growth in business and financial services.

Initial estimates of GDP are invariably revised because the first reading is based on only 40 per cent of the full data. The worrying prospect is that such revisions – which tend to be in the range of 0.1-0.2 per cent – can go either way. Thus it is entirely possible that Britain hasn’t exited recession at all, and it will take another couple of months before there’s a definitive verdict.

Whatever the data says, we already know how agonising the recovery will be. It could be years before Britain returns to its pre-recession position and any attempt to remove the fiscal support measures risks killing off the recovery before it starts.

That is not good news for Gordon Brown’s government, facing an election in the next few months. Polling day is now widely expected to be on May 6th, although there has been no official confirmation of the date yet. The PM and his chancellor Alistair Darling declared themselves vindicated yesterday in their forecasts of a return to growth by the end of 2009, but the glacial rise of 0.1 per cent doesn’t make much of an election slogan.

In April, we’ll have initial estimates of how the economy has performed in the first quarter of 2010 and they’d be very unwise to pin any electioneering hopes on those figures either.

There are difficulties too for Bank of England policymakers in deciding just how and when to turn off the printing presses, leaving the economy to cope on its own. The decision would have been tricky enough even with a robust bounce-back; now it will be even harder.

Fiona Walsh writes for the Guardian newspaper in London