In terms of the question of whether Britain is in an economic recovery, the short answer appears to be yes. However, the extent of that recovery depends on who you talk to and which figures you believe. In August of last year the governor of the Bank of England said that, at that point in time, Britain was more than half way towards full economic recovery, which would indicate that we’ve made significant progress since the financial crisis began back in 2008. This is of course good news for all of us, as belts have been tightened and budgets cut for most people over the past seven years.
According to the Organisation for Economic Co-operation and Development (OECD) the current level of recovery will continue far into 2015 and 2016, with the organisation predicting growth of 2.7% in 2015 and 2.5% in 2016. According to the OECD, the continued recovery will come as a result of the increase in job creation in the UK economy and thanks to consumer spending, which it described as being the ‘main engine of expansion’ driving the UK economy. However, the OECD highlighted that wage growth in the UK had been surprisingly weak – something that many of us will have felt quite keenly. It stated that, “stimulating retraining and encouraging migration in occupations where shortages arise would reduce labour mismatches and support balanced growth through higher productivity.” However, the OECD also said that if productivity doesn’t increase then it could negatively affect overall levels of growth.
So, that’s the official analysis of the situation from one of the most trustworthy bodies. But how has this translated into the reality that we all live in? Well there have been rises in factory output and car sales – the most recent figures indicate that car sales figures are the highest they have been in a decade. House prices continue to remain high -while the forecasts are that they are likely to cool off during 2015 they are still at some of the highest levels that they have ever been. There has been a fall in unemployment numbers, with the number of people who are out of work falling from 58,000 to 1.91 million in the three months leading up to November last year. Interest rates have remained low thanks to the Bank of England opting to fix them around the 0.5% level, although many people believe that rates will probably rise during 2015 at some point – which in itself is a signal of belief in the recovery of the UK economy.
So, when it comes to the value of our homes, the prospects for getting a job and the amount of disposable income we are all hopefully going to have in the next year or so things are indeed looking very positive. While the full effects of recovery might not have filtered yet down to everyone, the hope is that over the next couple of years we will all start to feel some benefit.