Until recently the prevailing economic mood in Britain had been one of unremitting gloom. The Economist reports the economy was hit hard by the pandemic and experienced a more tepid recovery than its international peers. Britain seemed to be a laggard among the G7 group of rich countries. But the gloom had started to evaporate. The Office for National Statistics, which produces the official data, rewrote recent economic history at the start of this month, revising up the numbers for 2020 and 2021.
Britain’s relative performance now looks more respectable. Lower inflation and faster wage growth have bucked up consumers too, with barometers of their confidence climbing away from record lows. But conditions are still tough. Interest rates have increased at the fastest pace in decades. Surveys of purchasing managers at firms point to weakness ahead. GDP numbers for July, released on Wednesday, showed a 0.5% month-on-month fall in output. That adds to the sense that Britain is not out of the woods yet.
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