London: Hopes that Britain has finally emerged from its post-recession doldrums received a triple boost with news of surging factory output, higher car sales and rising activity in the housing market.
Fresh signs that the economy may achieve the “escape velocity” sought by Mark Carney, the new governor of the Bank of England was provided by data covering industrial output and the two biggest ticket items of consumer spending.
The Office for National Statistics said an across the board increase saw manufacturing production grow by 1.9pc in June following declines in both April and May.
Over the three months to July — a better guide to the underlying trend — UK factory output was up 0.7pc. Industrial production, which includes North Sea oil production and output from the domestic energy sector, was up 0.6pc over the same period.
Meanwhile, the Halifax, the UK’s biggest mortgage lender, reported a 0.9pc jump in house prices in July amid evidence that government schemes were encouraging buyers back into the market. Martin Ellis, Halifax housing economist, said: “House prices in the three months to July were 2.1pc higher than in the previous three months. This is similar to the rates of increase recorded throughout the first six months of 2013. Prices in the three months to July were 4.6pc higher than in the same three months last year, the highest annual rate since August 2010. Sales have also picked up with total purchase transactions for the first half of the year 6pc higher than in the same period last year.
“Signs of improvement in the economy, underlined by the recent evidence of a rise in gross domestic product in the second quarter and increases in employment, appear to have boosted consumer confidence. Greater confidence is likely to have underpinned the increase in housing demand. Official schemes, such as the Funding for Lending Scheme and the Help to Buy equity loan scheme, may also be raising demand. House prices are expected to continue to rise gradually through this year with only modest economic growth and still falling real earnings constraining housing demand and activity.”
Yesterday’s upbeat news comes after data on Monday showing Britain’s dominant services sector enjoyed its best month since before the financial crisis.
The Guardian
