A good news day

By Steve Pateman
Head of UK Corporate and Commercial Banking

With summer upon us, the halfway point of 2011 seems as good a time as any to look at the state of the economy. Where we are now and where we might be in the next six months.

So far, the picture this year has been mixed. On one hand, there are signs that the recovery is underway in some sectors of the economy. Exports have steadily improved and whilst manufacturing slowed in May, PMI indicates that the sector is still expanding. On the other hand, there is no doubt that for many businesses serious challenges remain. Inflation has stayed high, public spending cuts are beginning to bite, and the general mood is still one of caution.

On a positive note, many business people I speak to are optimistic. They are actively searching for growth opportunities, looking to invest and hire new people, and in many cases responding to the Government’s call for greater focus on export markets.

The ‘hidden recovery’ does seem to be underway reflected in the 400,000 private sector jobs that have been created in the last few months and, recently, George Osborne noted that UK growth (excluding Financial Services) was at record highs. In particular, there are strong signs of growth in some parts of the leisure and retail market — albeit for others it remains tough — yet the negative headlines seem to dominate the good as seen by the commentary around the sector growth prospect for the UK.

It is hard to perhaps see a clear picture which reflects the mixed and fractured make-up of the UK economy, however while we are yet to see the 2011 quarter two GDP (gross domestic product) figures, it seems the economy, at least in some sectors, is beginning to return to something like normal. It’s not all good news, certainly, but the mood on the front line of UK Plc (public limited company) is beginning to look somewhat brighter!

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