OXFORDSHIRE’S financial experts last night said the county should brace itself for more economic gloom – despite tentative signs of growth.

Business leaders yesterday heralded the beginning of the end for the recession which has blanketed the UK for two years.

However, there were warnings against over-optimism after the Government’s Office of National Statistics pointed to economic growth in the last three months of 2009.

During the final quarter of 2009, figures showed a 0.1 per cent growth in gross national product compared to the previous quarter.

It was the first positive set of figures since the first three months of 2008, but there were warnings the figure could yet be revised.

Analysts suggested that while the country may have officially come out of recession it was by no means out of the economic woods.

And, in Oxfordshire, there was concern the county could be in for a “double dip” as public spending cuts take hold later in the year.

David Doughty, chairman of the Oxfordshire Economic Partnership, said: “We are more exposed to government public spending cuts than many other places and so, within two years from now, we could see another drop here –though not as bad – as the cuts bite. At the moment we are in a sort of lull before the election, but cuts will come.”

Shopkeepers and businesses told the Oxford Mail they thought more tough months were ahead.

Economist Adrian Cooper of Oxford Economic Forecasting, said: “We have been relatively sheltered here.

“Going into shops and restaurants it could have seemed that the recession was not as bad as in other places.

“But in the recovery period, which will be long and slow, we could find ourselves poorer in Oxfordshire than some other places that are not so dependent on public spending.”

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.”

Unemployment in the UK rose by 877,000 from April 2008 to hit 2.45 million in the three months to October 2009.

Last month, there were 8,344 people out of work in Oxfordshire.

Oxfordshire County Council has already announced it is cutting500 jobs.

Cuts are also likely to hit the health service – a major employer in the county – but the impact is still unknown.

Mr Doughty said hospitals, such as the John Radcliffe in Oxford, would have less room to manoeuvre because they still had to pay back investors under Private Finance Initiative schemes.

He added: “The falling pound has helped exports, which in turn has helped manufacturing industries such as BMW’s Mini plant, where employment levels are now approaching those seen before many agency workers were laid off almost a year ago.”

Mr Cooper added: “It’s certainly no time to hang out the bunting, but looking on the bright side, things could have been a lot worse.

“This time last year, the global economic situation was worse than the first year of the Great Depression of 1929.

“The fact that, as we come out the other side, the unemployment figures are not nearly as bad as feared, and that we are only looking at the fact that living standards will grow much more slowly than we had hoped, is a tribute to governments and central bankers having worked together.”