Depending on whom you ask, Britain’s return to growth after the 2008 crash might has been steady and firm or painfully sluggish by historical standards. As both opinions are almost certainly tainted by political motivations, we can probably assume the truth is somewhere in between – a slower than expected return from a global crash without precedent.
But a sustainable return to growth it is, and on that there are few dissenting voices. Last week the Bank of England’s governor Mark Carney announced a huge reduction in the unemployment forecast on the back of an expected growth of 2.8%. If the forecasts are accurate – and again, all the signs are that they are – the results will reach far and deep as that elusive quality of confidence returns to the British business mindset.
The increase in the BoE base rate that was scheduled to accompany a triggering fall in unemployment is not thought to be going ahead in the near future, however. It will remain at 0.5%, where it has been since 2009. This is welcome news for borrowers and start-ups but was seen in some quarters as a U-turn. However it does display a welcome willingness in the new regime to react to situations as they are, rather than as they should be. If low interest rates are indeed playing a part in the recovery, then maintaining the status quo is a prudent move.
While Bank of England forecasts can themselves cause economies to edge in the direction of their predictions, the juggernaut of the national and global economy will be the main determining factor. And a telling sign that that might be picking up speed came last week as figures from Greece showed that its economy recently showed a quarter of growth for the first time in four years.
“Steady as she goes” seems to be the call from central banks and governments around the world. It finally seems like the balance is about right.