There is evidence of a slow recovery all over the UK and this quarter’s 0.8% growth is the strongest 3rd quarter in more than 10 years; in fact preliminary estimates suggest that the UK’s economy is 2.8% bigger than a year ago & has been growing at 3.2% since the start of 2010.

Construction (up 11% on last year), distribution, hotels, restaurants and financial services have performed well. The public sector has recovered slower and posted around 1.1% growth since last year, however public investment money can take around 12 months to become visible in the public eye.

The government’s deficit has reduced by around 3% of GDP in the last 12 months which is encouraging.

It will take time for the UK’s recovery to pick up momentum; however these new figures have settled a lot of people’s concerns. Now that the recovery is underway, the Bank of England will be concerned about inflationary pressure on its currency and the bank’s target rate of 2% may be difficult to keep.

Standard & Poors has changed its negative view on the UK’s credit rating and reversed it back to a stable outlook. S & P was the only rating agency to threaten the UK’s rating and it is a triumph for the coalition government to bring the country’s rating back to a stable view. The government has been upfront and brutal with its cuts to the budget, but these measures seem to have worked.

A recent article from the BBC stated:

“When people raise fears about the impact of deficit cuts on the recovery, Mr. Osborne likes to say that the government's plans are not that different from Labor’s: a matter of a mere £6bn a year in extra spending cuts, on average, between 2010-11 and 2014-15, roughly 0.4% of GDP (or just over 1% of spending).

Yet, on the government's own telling, that modest amount of additional tightening has somehow been enough to take us from the "verge of bankruptcy" to having some of the safest sovereign debt in Europe.”