The UK’s Office of National Statistics (ONS) has standardized on Europe’s methodology and revised upwards Q2 growth. Check out the news in the Guardian:
via UK economy bigger and growing faster than thought, says ONS | Business | The Guardian.
The good news has widened for the UK economy but exports are still disappointing.
Personally, I am still worried to what extent the UK government’s guarantee of property borrowings for first time home buyers has artificially impacted consumer demand. Deep down, for the UK to sustain economic growth, it must improve skills of the indigenous workforce and seriously increase exports.
Sadly, the UK’s economic performance will be truly eye-watering for the rest of Europe which has been depressed because of excessive austerity. In the Eurozone, Southern Europe has been savaged from German led fiscal policies, promoted through the IMF, the ECB and the European Commission. This is all to do with the 3% fiscal compact that Eurozone countries formally adopted; German has been looking for strict housekeeping and reform but these policies have been widely criticized by most mainstream economists and these days the IMF.
Southern Europe, including Greece, Spain, Portugal, Italy, France and Cyprus could see growth, if they continue to reform. It is widely expected that Germany will reflate her economy and give some fiscal latitude in exchange for genuine reform.
Meanwhile, with continued outstanding growth from the UK, many will be wary of the Bank of England touching the brakes and triggering higher interest rates.