It’s been a gloomy few months in the UK. Yes, this may well be one of our wettest summers in history, plus we were kicked out of Euro 2012 football championship. And let’s not forget that house prices are still declining.
But all is not lost! Inflation is falling, retail sales are rising and the Olympic Games are on their way. The UK economy is finally starting to look up. 39% of UK businesses say the recession has encouraged them to streamline their business and reduce costs, research shows. These findings come from the biannual SME Trends Index by Hilton-Baird Financial Solutions, questioning business owners about the challenges currently facing their business
The Bank of England is set to help boost the housing market and other areas of the real economy with a “funding for lending” plan. This would provide cheap loans to banks on the condition that they are passed on.
Furthermore, the jobs market appears to be less bleak. An ING Financial Markets survey suggests firms are inching toward hiring more staff. Another survey, The Pay Report published by Income Data Services, indicates the steady decline in real, inflation-adjusted incomes may be slackening. “If private sector pay settlements remain at current levels and (RPI) inflation falls further, then the squeeze on workers’ incomes which began in 2008 will have been loosened significantly,” said Ken Mulkearn, editor of the report.
Even the government’s recent announcement that it has decided to delay a rise in gasoline taxes will play into the feeling that the UK economy is starting to improve.
There is plenty of reason to bet that the pound will continue to strengthen. UK consumers hit the shops last month, with retail sales in June the strongest of any month since December 2010, according to the CBI‘s latest survey. The study also indicates retailers are confident that sales will improve in the weeks before the July 27 start of the Olympics.
Image: CJ Isherwood