The expansion has been helped by growing confidence amongst consumers and by signs that companies are ready to borrow and spend more, although the UK’s largest trading partners in the Eurozone are still in a weak state.
The rise in gross domestic product (GDP) is the best performance, excluding special events, seen since the third quarter of 2011 and comes as a huge boost to the Chancellor, who a scant three months ago was potentially facing a triple-dip recession.
The air of optimism has been helped by further upbeat company news this week, with pub chain JD Wetherspoon saying it would speed up new pub openings next year, helped by a better mood amongst customers, while developer British Land has invested £512m in property acquisitions since April.
In addition, consumers are more optimistic about the economy than at any time since April 2010, as measured by a new consumer confidence index by market researchers YouGov and the Centre for Economics and Business Research.
British manufacturing also seems to be on the rise, with order books in July at their strongest so far this year, according to a long-running survey by the Confederation of British Industry.
However, the recovery is still fragile and there is no news yet on Europe’s second quarter results, so the new Governor of the Bank of England, Mark Carney, is still likely to judge that it needs extra help to consolidate.
It is widely expected that the Bank will start to provide detailed guidance from next month on how long interest rates will remain low, in an effort to encourage consumers to spend and businesses to borrow and invest.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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