Has anyone noticed a change in tact recently, that the media are slowly starting to talk more positively about the UK economy?
Is this a genuine sign that things are starting to improve in the UK economy, and more importantly can we all suddenly start to breath a sigh that the worst is really over?
Take these comments from Pegasus Capital;
“..UK growth forecasts being revised upwards by the IMF, house building and house prices rising the most in a decade, exports at a record high in 2013, unemployment down to 7.1% and inflation falling below the BoE target of 2%..”
It all sounds pretty good doesn’t it?
The Truth is Out There
I love this saying ‘the truth is out there’, it takes me back to watching the X-Files. I wanted to be Fox Mulder, not to find the truth but to spend my days alongside Gillian Anderson.
However, with the UK economy the truth is out there, it just depends on who’s version of the truth you believe.
The Pegasus Capital update goes on to say;
..a budget deficit of £100bn this year and despite £375bn of QE, growth is still 1.4% below that of 2008. Whilst over 1.1m jobs have been created since 2009 (up 3.6%) this has been against a backdrop of a 3% population rise and does not disguise the fact that youth unemployment remains at 20%..
So is the UK economy moving forwards, standing still, or heading backwards?
The truth is that the UK economy depends so much on other worldwide economies that simply looking at what is going on in the UK is no longer good enough.
Current UK Economy Impact Factors
To get an idea of just what could impact on UK growth then consider these current factors;
- What is happening in Ukraine
- Chinese activity around disputed pacific islands
- North Korea losing the plot
- US Federal Reserve policy
Let’s face it, any of the above could suddenly change worldwide alliances and unsettle markets across the globe, including our own UK economy.
In conclusion it is more likely that non-economical factors will decide just how quickly the UK economy recovers and how sustained that recovery may be. You could analyse all the statistics you can find and still not reach a conclusion.
The truth is out there, just nobody actually knows where…
By Dave Farmer
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