For the first time in a very long time UK economic data is positive - and it is getting better.
Strong data suggests the UK economy could finally be back on its feet after one of the most sluggish returns to health in history.
Firstly, a preliminary estimate suggested gross domestic product grew by 0.6 per cent in the second quarter of this year - hardly the 5-6 per cent we talk about in emerging markets, but compared to what we are used to seeing here in the past few years it is a pretty big positive shock to the system.
Then there was the news that the “double dip” recession - initially thought to have hit these shores in 2011 - has been revised away by the Office for National Statistics.
Meanwhile, the purchasing managers’ index - which measures sentiment across different sectors in the economy - reported gains across the board, with data released on Monday indicating that the services sector expanded at its fastest pace for more than six and a half years last month. Hot weather and British sporting success have been cited as the primary factors boosting retail sales in July.
Not forgetting NIESR’s decision last week to upgrade its UK growth forecast from 1.2 per cent to 1.8 per cent in 2014. It is beginning to look as if the country has got itself back on track.
Of course there are still underlying problems: take-home pay is still falling, and inflation spiked to 2.9 per cent in June, significantly above the Bank of England’s 2 per cent target. But now that positive data is starting to outweigh negative data, these factors seem more easily overcome.
Economic turning points seem less significant at the moment they happen. When a little over a year ago European Central Bank president Mario Draghi said he would “do whatever it takes to save the euro”, it was certainly noted by markets but only over time did it come to be commonly cited as the moment that investors began to have confidence in the eurozone again.
Given the gathering positive momentum it will come as little surprise if we look back at the summer of 2013 as the moment at which the UK economy finally started its upward trajectory.
Eleanor Lawrie is a reporter and economics correspondent at Investment Adviser
