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In the UK official figures have shown that the UK economy emerged from recession faster than was previously estimated. Data from the Office for National Statistics said the economy grew 0.4% between October and December in 2009.

This was faster than the previous estimate of 0.3% growth during the quarter. The ONS said the upward revision was due to higher output from business services, construction and agriculture. For the year 2009 as a whole, GDP contracted by 4.9%, the ONS said. The previous estimate had been for a contraction of 5% over the year. GDP in 2008 grew 0.5%.

Jonathan Loynes, economist at Capital Economics, said the headline GDP numbers were good news but the big picture of a fragile and unbalanced recovery remains unchanged.

The Pound rose 1.01% against the Euro during trading yesterday to close the day at GBP 0.8906. Against the US Dollar the Pound fell 0.64% to close trading at GBP 1.5071 in the forex online market.

Elsewhere in the UK, house prices rose in March as potential sellers delayed putting their properties on the market, sustaining values as demand waned, said Nationwide Building Society.

The average cost of a home increased 0.7% to 164,519 pounds ($246,260) from February, the mortgage lender said. Prices fell 0.8% last month. Home values are now 9% higher than a year earlier. In London, prices jumped 2.5% in the first quarter.

“The number of homes for sale has not increased appreciably, meaning that the impact of lower buyer activity on house prices has not been too negative,” said Martin Gahbauer, chief economist at Nationwide. “With greater than usual political and economic uncertainty ahead of the upcoming general election, potential homebuyers are proceeding cautiously.”

The report adds to evidence of an uneven recovery in the U.K.’s housing market after last year’s slump. While mortgage approvals dropped to a nine-month low in February as banks keep a grip on credit, a lack of supply is keeping values stable. In London, a weaker Pound and a revival of bankers’ earnings have helped spark a “mini boom,” Nationwide says.

The main factors which brought about the revision were lower levels of personal and government spending and lower levels of investment. The figure is up significantly on the 2.2% annualized rate of growth seen in the third quarter of 2009, it is also the strongest reported since the third quarter of 2003. The Commerce Department said that the pickup in inflation adjusted growth or ‘real GDP’ reflected rebounds in business investment in equipment and software as well as net exports.

In Japanese retail sales jumped sharply in February as government stimulus measures encouraged consumers to spend, official figures have shown. Sales rose by 4.2% from a year earlier, much more than analysts had expected. The rise happened despite falling prices in Japan, which usually encourage consumers to spend less and wait until prices fall further. Analysts said the rise was unsustainable given the deflationary pressures in Japan.

“Given the stagnant income situation, this sizeable rise in retail sales is too good to be true,” said Seiji Shirashi at HSBC Securities in Tokyo. “Some government stimulus measures will continue until April and others will last until September. After these incentives expire, there should be a big negative rebound in retail sales”.

On Friday the Yen fell for the fourth straight day against the Euro, its longest losing streak in five weeks as the global recovery gathers momentum boosting demand for higher yielding assets. The Yen fell to JPY 124.41 against the Euro on Friday.

In the wake of last week’s budget announcement in the UK opinion polls are still showing no clear lead for either party. Pundits feel the General Election is unlikely to be called before the Easter break with a date in early May looking more likely. On Friday Sterling held on to its gains from earlier in the week, climbing 0.60% against the US Dollar to close trading at GBP 1.4894 in the forex online market.

This week sees a relatively slow start to the week in terms of data but things will pick up on Wednesday and the end of the week will bring the release of the US Non Farm Payrolls and Unemployment reports as well as the Good Friday holiday in most trading centers.

In the US first time jobless claims fell to the lowest level in six weeks as the rebound in the U.S. economy encourages companies to make fewer cuts in payrolls.

First-time jobless applications declined 14,000 in the week ended March 20 to 442,000, lower than anticipated according to Labor Department figures published yesterday. The number of people receiving unemployment insurance decreased, and those getting extended benefits also fell.

Employers are slowing the pace of payroll reductions, indicating budding optimism in an economy that’s been lifted by a pickup in manufacturing and expansion overseas. Companies now need to move beyond jobs cuts and start hiring to ensure the recovery from the deepest recession since the 1930s is sustained.

President Barack Obama signed an $18 billion jobs bill into law on March 18th that provides a tax break to companies hiring unemployed workers, saying additional steps are needed to drive down unemployment. “There’s a lot more that we’re going to need to do to spur hiring in the private sector and bring about a full economic recovery,” Obama said.

The US Dollar in the forex online market which had reached a ten month high against the Euro on Wednesday fell back slightly yesterday as the Euro gained 0.43% to close at EUR 1.3329.

Elsewhere in the US, Federal Reserve Chairman Ben Bernanke yesterday said the U.S. economy still needs low interest rates and that the central bank will be ready to tighten credit “at the appropriate time.”

“The economy continues to require the support of accommodative monetary policies,” Bernanke said today in prepared testimony to the House Financial Services Committee, repeating parts of a statement to the panel from last month. “However, we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus.”

The central bank chief and his colleagues have been outlining their strategy for tightening credit in time to prevent the recovery from stoking inflation. Officials are concerned that the federal funds rate, their main policy tool for 20 years, isn’t as effective as before in influencing borrowing costs.

“As the expansion matures, the Federal Reserve will need to begin to tighten monetary conditions to prevent the development of inflationary pressures,” Bernanke said in the text of remarks. “We have full confidence that, when the time comes, we will be ready to do so.”

Responding to questions, Bernanke said the “unemployment situation is very weak,” with 40% of those without jobs being out of work for a long time, and the housing market is “still quite weak.”

When Bernanke convened the Federal Open Market Committee for its March 16 meeting, policy makers left the benchmark federal funds rate in a range of zero to 0.25% and repeated a pledge to keep rates low for an “extended period.”