The National Institute for Economic and Social Research said yesterday that the British economy grew by 0.2% in April and 0.1% in May. Whilst we seem to hear such conflicting information from all kinds of ‘credible’ sources on a near daily basis, it’s difficult to know who and what to believe but, what makes this news interesting is that this data comes from an independent economic think-tank that uses similar economic modeling to that of the treasury who in the past have been rather successful at predicting economic trends.
The small but highly significant growth in economic output is being credited to the performance of the service and industrial sectors so, is it time to start getting excited? Well, whilst it’s important to remember that these are tentative signs of some degree of economic recovery, we’ll have to wait until July when the official statistics on GDP are released but the data from this think tank is consistent with other positive news on the stabilisation of the economy.
One thing is for sure, we have seen from past recessions that periods of growth can be expected in the midst of a long recession and it is important to point out that the recovery from the near collapse of the banking sector is highly unlikely to be a straight upward trajectory from the depths of recession but nonetheless, it’s nice to hear some positive news even if we do have to be cautiously optimistic!