What recession? What home value crash? UK is booming and confidence is UP!
Brits have a proper to be glum given the cost-of-living disaster, which has plunged tens of millions into poverty. I do not need to downplay the hardship many individuals face, by means of no fault of their very own, however new figures counsel the doom has been overdone.
The nation goes by means of a tricky time however as I wrote final week, much of the criticism of our economy has been twisted and distorted for political reasons.
Ever since Brexit, a bunch of worldwide our bodies have pinned the nation’s each woe on our determination to depart the EU. Even the Bank of England have been swept up within the adverse groupthink.
Last 12 months, the BoE predicted we confronted the longest recession in historical past with a hellish two-year slump heading our way.
So far, the recession hasn’t occurred, however that hasn’t stopped a heap of distinguished economists claiming it is simply across the nook.
Two key units of figures have proven what’s taking place in the actual world, they usually just about rule out the prospect of a UK recession.
The first exhibits shopper sentiment hitting an 18-month excessive. It’s now “virtually back to normal”, in line with accountancy group PwC.
PwC’s chief of trade for shopper markets Lisa Hooker stated whereas inflation stays a priority “we’re seeing fewer people cutting back and spending intentions have consistently improved over the past 12 months”.
It’s not a one-off, both.
The GfK Consumer Life survey modestly calls itself “the most comprehensive & longest-standing consumer trend & prediction study in the world”. It not too long ago reported an increase in UK shopper sentiment stretching again six months.
It’s uncommon to get a recession at a time when shopper sentiment is rising and unemployment is low, as it’s right this moment.
And it’s even rarer at a time when wages are rising, as they’re right this moment, up 7.3 p.c a 12 months within the three months to May.
Perhaps that is why customers are so upbeat. They’ve had a good pay rise for as soon as.
The pound is rising, too, towards each the euro and the greenback. Last September, after the mini-Budget fiasco, sterling seemed set to break down to parity with the greenback, the place £1 equals $1.
Today, £1 buys $1.29. That’s an increase of greater than 20 p.c.
Sterling weak point was broadly declaimed as an indication of our nationwide decline. So what does sterling energy inform us? I’ll go away you to determine.
READ MORE: UK face ‘worst house price crash’ in world. Except I don’t believe it
Now for the second piece of optimistic information. The Confederation of British Industry’s much-watched enterprise optimism survey hit a two-year excessive in July, as orders rise however costs fall.
It appears that British companies are simply as resilent as our customers. By distinction, the eurozone is in chaos and Germany is in recession. Which may be very unhappy and no cause to brag in any respect.
There’s nonetheless time for the Bank of England to mess every part up by mountaineering rates of interest time and again, because it appears hellbent on doing.
Still, we’ve survived every part BoE governor Andrew Bailey has thrown at us to date, so I’m positive we’ll get through his next batch of unforced errors, too.
Even our stock market is in a sweet spot, as international traders realise we’re not a complete basket case in spite of everything.
The massive query is what’s going to occur to the housing market. Will property prices finally crash?
They’ve additionally been surprisingly resilient, falling simply 2.6 p.c within the 12 months to June, in line with Halifax.
I count on a slide however predictions of a 15 p.c and even 25 p.c drop look extra like hysteria than cool-headed evaluation.
The UK nonetheless faces a bunch of troubles and our national debt terrifies me, however the nice British shopper is standing as much as the worst, and it is nice to see.