Britain's economy gathers pace

The recovery quickened again in the second quarter after its slowdown in the first three months of the year.

Britain's recovery quickened again in the second quarter after its slowdown in the first three months of the year. GDP rose by 0.7% between April and June, up from 0.4% in the first quarter. The uptick means projections for annual growth are now nearing last year's total of 3%. Britain is also finally producing more per person than before the crisis GDP per head is back to the 2008 peak.

What the commentators said

Manufacturers' order books grew at their slowest rate in two years this month, noted Philip Aldrick in The Times. They are under pressure from the stronger pound, while demand from the eurozone remains weak. In the absence of any support from external demand, reduced government spending simply "piles the pressure on households and companies to compensate by increasing their own spending and debts", said Warner.

Still, while the recovery may be unbalanced, at least the prospects for consumption are encouraging. Consumer confidence is at multi-year highs and real wages are climbing. And with inflation set to stay low, interest rates won't rise just yet. Nandini Ramakrishnan of JP Morgan Asset Management expects the first hike "closer to 2016 than to now".

Recommended

Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021
Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
A beginner’s guide to inflation – everything you need to know
Inflation

A beginner’s guide to inflation – everything you need to know

One of the most frequently mentioned topics in the news these days is inflation. But what exactly is inflation and how does it affect the economy and …
18 Jan 2021
Why the City should create a single financial market with the Swiss
Economy

Why the City should create a single financial market with the Swiss

A tie-up between London and Zurich, two global financial centres, could pay huge dividends for both, says Matthew Lynn.
17 Jan 2021

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021