Cause for cautious optimism
Yesterday's announcements on the economy from the Office for National Statistics continue to beckon us out of the shadows of recession and onwards towards the sunlit uplands of recovery.
The figures on growth in the key sectors of construction, manufacturing and services are considered by some commentators to be so encouraging that further, radical austerity measures are no longer required.
Recovery is assured, we are assured. In recent days, as good statistics have followed good statistics, those with perhaps the shortest memories have even suggested that the economy has reached "escape velocity" – meaning there is no longer any danger of a return to recession.
We would caution against celebration just yet but without a doubt the mood has certainly lifted compared with the gloomiest years of the crisis, when stagnation followed collapse and every economic indicator was a bleak one.
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But the fact remains that the British economy is still much smaller than it was before the meltdown of 2008. The Daily Telegraph reported last week that damage done since then means that every person in the UK is, in effect, £7,500 poorer than they would be had the recession never happened. That is a significant deficit for all of us to bear – and a sobering reminder to the politicians, economists and bankers who would all too happily draw a line under the trials of the last five years and move on as speedily as possible.
The new governor of the Bank of England, who we note is due, on Wednesday, to make his first public speech since taking over from Mervyn King in the hottest of fiscal hot seats, could choose to surf this new wave of optimism and let the "escape velocity" take care of everything.
We suspect he is too wise to take this easy option. Instead, expect Mark Carney to redouble his focus on recovery to ensure that the pain of the last five years is at least followed by sustained economic improvement. Ordinarily, Mr Carney might look to cut interest rates to give families and businesses extra reason to spend, borrow and increase their economic activity. He can't do that now because interest rates are at all-but-zero levels and simply cannot be cut back any further.
A sophisticated plan is called for, more sophisticated than we could attempt to consider. But one thing is certain. Recovery planning needs to be carried out with a good deal more common sense than was applied to our economic fortunes in the years before 2008.