UK Growth Better Than Expected
The second quarter of this year has shown better growth than anyone expected. The reasons for this are unclear, but some think that since the global economic downturn has started to creep out of the news that people have simply started spending again. This is based on the idea that people kept being told they were penniless and struggling so much that they stopped spending. Of course, there are numerous reasons why the economy is doing better than expected, but changes in public opinion have been known to have an impact.
How well has the country done?
Strap yourself in, because here it is–the UK treasury has shown a 0.7% rise in GDP. Sit down and catch your breath at that earth shaker.
Okay, so it is not much of a growth, but it “means” quite a bit. The Gross Domestic Product (GDP) is one of the factors that we use to judge the health of the UK economy. Between April and June, the GDP rose by 0.7% compared with the GDP from the previous three months. The UK has had a great year compared to what government forecasters were expecting, and this figure could be a sign that the UK is going to miss the double dip recession.
What does it all mean?
The Office of National Statistics thought that our growth would be 0.6%. UK economists had their fingers crossed that Britain would just about manage to reach the same growth as last year, which was 0.6895%. The fact that GDP has beaten this number is great news, and is part of a trend that shows continual growth. Add to this fact that the second quarter is not when economists expect growth, and this is further proof that the UK is doing well. It means that not only is the economy recovering and growing, but it is also recovering and growing at a faster rate.
UK growth is on par with Germany
For those of you who do not know, Germany is the powerhouse of Europe. If they went bankrupt tomorrow, then Europe would shortly follow it. It is the biggest economic power in Europe, and is aptly described as the big cog in the Euro machine. The fact that Britain’s growth is on par with Germany is very encouraging.
The dark cloud riding the silver lining
Like many countries, the UK is still borrowing money. But, borrowing did go down last year, and the deficit is starting to get smaller. Unemployment is a problem still, but even unemployment rates are starting to drop. These two factors alone mean that the UK still has a long way to go, but that finally things are starting to look brighter.
What else is up?
The export trade is always helpful when it comes to economic recovery. China has destroyed a massive part of every country’s export trade. Why bother buying from anywhere, when you can get Chinese imports at a fraction of the price? But, even despite this fact, UK exports have gone up by 3.6%. Consumer spending is up by 0.4%, and pay and pension contributions have gone up by 2.4%, which is the biggest rise in 13 years.
Retail figures are just starting to come in for the first half of the year and are looking very promising, as are the automotive sales. Surprisingly, there is a lot of positive information coming in about the building and manufacturing trade too.
Don’t break out the champagne yet. Britain is not out of the woods by any stretch of the imagination. But, compared to how difficult the economists thought it was going to be, it looks like the UK may have a bright future ahead.