Time to Feel a Bit More Confident on Growth

With a Eurozone crisis raging throughout the period, August rioting and talk of 'economic war' from some UK Cabinet members, it appears British businesses and consumers have confounded the media, political and economic commentariat.
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Wow - no commentator seriously expected to see 0.5% growth for the past quarter.

With a Eurozone crisis raging throughout the period, August rioting and talk of 'economic war' from some UK Cabinet members, it appears British businesses and consumers have confounded the media, political and economic commentariat.

Good thing too.

Surprises like this are good news for us all. They influence our confidence levels either as consumers or firms. I have been very critical of those who want to talk recovery down. The only way to get out of the hole we are in is to see a private sector led recovery combined with a reduction in the nation's structural deficit.

The service sector showed even stronger growth levels at 0.7%. Government should not be in the game of 'picking winners' and we need to be careful about the rebalancing which policymakers on all sides of the political divide are so fond.

Lets not rush into this - our recovery depends on bankable growth. Let's worry more about that rebalancing when we have solid, sustained growth.

The Government will seize on the numbers to say Plan A is working better than expected - and the UK is in a much better position than the Eurozone while the economic commentators are already saying one swallow does not make a summer and we are barely above stagnation levels.

As we approach the Autumn Statement on 29 November, George Osborne has a real task on his hands to show the Government can deliver policies which enhance growth levels. He continues to look for ideas.

But for now let's start to feel just a bit more confident - 0.5% is better than anyone dared hope.