The last few weeks have seen a raft of upbeat news on the UK economy. The country is officially out of recession, with the economy growing by 1% in the three months to September.
Construction remains in the doldrums with its output continuing to decline. However, Britain’s job market continues to improve. Unemployment fell by 50,000 over the last year to 2.53 million.
More encouraging is the fact that more of us are in work. Total employment increased to 29.6 million – over half a million more than a year ago. Mortgage lending rose in September and household borrowing fell. A recent CBI survey says that even Britain’s retailers are feeling more upbeat.
What the commentators said
Simon Read in The Independent isn’t getting carried away with the GDP figures: “Individuals don’t normally feel the benefit of GDP growth – through pay increases or more jobs – until months later. And by that time we will all be worse off anyway, hit by rising fuel bills, higher food prices and soaring inflation.”
Inflation fell to 2.2% in September as last year’s utility bill rises fell out of the calculation. Other costs such as transport are rising at a much faster rate. With big increases in energy bills just announced, inflation is likely to rise.
The good news didn’t impress former deputy prime minister Michael Heseltine. He reckons the government must leave “no stone unturned” in its efforts to boost the economy. The Bank of England governor Mervyn King seems to agree. He warns anyone expecting a quick return to growth based on one month’s data to be prepared for a long wait.