UK on verge of economic recovery

| April 10, 2012 | 0 Comments
UK on verge of economic recovery

The UK and German economies may have reached a positive turning point, according to the Organisation for Economic Co-operation, which just a couple of weeks ago said that the UK was in recession.

The OECD’s latest forecast is based on its composite leading indicators (CLIs), which are trusted to reliably predict the economic outlook for the next six months.

The CLIs indicate an increase in UK economic activity in both January and February, although the improvement in February was weaker than anticipated, suggesting the recovery may be fragile.

German exports were expected to fall in February, but they increased for the second consecutive month, helped by stronger than expected demand from countries outside the eurozone.

However there is growing concern that Spain may be unable to repay its debts and growth remains slow in the French and Italian economies.

The head of Spain’s central bank has warned that a capital investment in its banks may be needed if the economy deteriorates.

The latest regional purchasing managers’ index (PMI) data from Markit and Lloyds TSB Commercial also suggests that the UK economy is starting to recover.

It suggests that the UK’s recovery is being led by London and the West Midlands, with the West Midlands manufacturing sector and London’s service sector both performing well.

The data shows moderate growth across most other regions of the UK.

“The latest survey confirms that there has been a solid pick up in momentum across the English regions, and this is yet another sign that a double-dip recession may well be avoided,” John Maltby, group director of Lloyds TSB Commercial, said.

The PMI figure for London increased from 55 in February to 58.2 in March, while business activity in the West Midlands reached its highest level since September 2007, with the region achieving a PMI figure of 60 in March.

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