Fears of a triple-dip recession have been blown out of the water with the strongest growth figures since the mini-boom caused by a surge in Olympic spending. Business confidence is up, consumers are spending more and almost every region is experiencing healthy demand.
Economists expect the Bank of England to this week revise down its inflation forecasts, suggesting the long squeeze on consumers might begin to ease a little.
GDP will grow one per cent this year and two per cent next year, according to forecasts from the Confederation of British Industry (CBI), as the recovery takes firm hold in the coming months.
Similarly Lloyds TSB’s purchasing managers’ index (PMI) has increased from 51.4 in March to 52.4 in April, indicating the economy is accelerating. A score of above 50 indicates growth. London is strong at 53.4, with Yorkshire’s 55.7 and the East Midlands’ 53.6 also very positive.
“Business activity was at its highest level since the end of August which should provide a solid platform for further growth,” said Lloyds’ David Oldfield.
Professional services firm BDO’s output index for the service sector also rose from 93.2 in March to 94.9 in April, just shy of 95, which would show growth.
Households are feeling the improvement too – spending rose 3.6 per cent in the year to April, according to Barclaycard. Those all feed through to the labour market – new forecasts from the Chartered Institute of Personnel and Development expect employment to keep improving after a slight wobble in recent months.