As this blog has been pointing out over the last few days, the UK economy seems to be in better shape than many had predicted.
According to the Office for National Statistics, Gross Domestic Product (GDP) increased 0.8 per cent in the third quarter of 2010, compared with an increase of 1.2 per cent in the previous quarter.
Whilst some (notably the BBC) have tried to spin this as decrease, the ONS rightly point out that allowing for the recovery in Q2 following the bad weather at the start of the year, the underlying growth in Q3 is broadly similar to that in Q2.
More importantly, it would seem that growth is taking place across the entire economy.
For example, services output rose 0.6 per cent in the third quarter, compared with a rise of 0.6 per cent in the previous quarter. Total production output rose 0.6 per cent in the third quarter of 2010, compared with an increase of 1.0 per cent in the second quarter. Finally, construction output rose 4.0 per cent in the third quarter of 2010, compared with an increase of 9.5 per cent in the previous quarter.
As pointed out on Monday, the private sector is currently sitting on around £65 billion of cash (with a similar amount due to be generated this year) and that, hopefully, will be reinvested back in the economy over the next twelve months, especially in privately funded construction projects.
The relative weakness of the pound at the moment also means that manufacturers, as well as internationally traded services companies, can take advantage of exporting opportunities and this will continue into next year as the rest of the global economy recovers.
Most importantly, the real situation contrasts starkly with those in the media and politics who have been trying to talk the UK economy into another recession.
Thankfully, such doomsayers have been proved wrong this time and one can only hope that confidence now returns to both business and consumers over the next few months and so helps to bolster the economy further,
