Is the UK economy approaching the fabled 'escape velocity' required to break free of the clutches of anaemic growth and recession which have blighted it for the best part of five years?
After a prolonged period of depressing economic data a number of indicators have turned positive at the same time, giving hope for a sustained recovery. The recent warm spell of weather has helped lift both the collective mood, after all it has been our best period of sustained summer weather since 2006, and also given retailers and other leisure operators a boost. According to British Retail Consortium figures, retail sales rose by 2.2 per cent in July against the previous year. This was the third successive month of improving retail sales figures. Elsewhere further signs of returning consumer confidence came from the housing market with both the Halifax and Nationwide surveys reporting house prices growing at their fastest rate in three years.
The manufacturing sector also resumed a growth trajectory, with production up 1.9 per cent in June, after a wobble in April and May. The sector was also boosted by news from the motor sector that car sales grew in July for the 17th successive month and were 12 per cent higher than the same month last year. The Society of Motor Manufacturers and Traders also upped its forecasts for sales over the rest of 2013. This optimism was further fuelled by Monday’s publication of the Purchasing Managers Index for the dominant services sector which showed a score of 60.2 in July, up from 56.9 in June. Anything above 50 indicates expansion, and analysts had been forecasting a modest move just above the 57 level.
