We have murmurings from The Governor of the Bank of England about interest rates going up and there are lots of indicators suggesting the UK economy is doing well. The fall in unemployment is one of the factors the bank of England have their eyes on but other indicators are looking good too.
The ICAEW’s second quarter business confidence monitor is also very positive. This is compiled from accountants in business close to UK companies at the confidence monitor result has been a reasonable accurate indicator for forecasting GDP growth (and decline). They are now forecasting a 3.4% growth for the UK economy this year and the creation of 450,000 new jobs in the next 12 months. (http://www.icaew.com/en/about-icaew/newsroom/press-releases/2014-press-releases/bcm-q2-2014-half-a-million-new-jobs).
But what of other indicators? Is the rush for new and renewal of passports at the Passport office an indicator that we have more money to spend on overseas holidays this year? Then the Tiptree jam indicator is on its way down. This is also the sign of an upturn in the economy as apparently we tend to treat ourselves to good quality jams in recessions, but move our spending onto other things as the economy and our own prosperity improves.
So an upturn in the economy isn’t good for everybody. Some traders at the Royal Three Counties show this weekend were complaining that their takings were the lowest compared to the last 5 years of recession. So what looks good for the economy as a whole will herald a change in spending habits that will catch others by surprise.