Hopes that the UK's long-awaited recovery is finally under way should rise this week with the economy returning to underlying growth for the first time since last autumn.
The Office for National Statistics' latest estimate of output between April and June is likely to show a 0.4 per cent decline – a stronger performance than originally feared. This technically extends the UK's double-dip recession, but when the 0.5 per cent hit to growth from the extra day off for the Diamond Jubliee is taken into account, it leaves the economy showing underlying – if marginal – growth for the first time since the third quarter of 2011.
The figures follow more cautiously upbeat comments from the Bank of England Governor, Sir Mervyn King, and chief economist, Spencer Dale, over a "slow recovery".
A far shallower decline for Britain's beleaguered builders – 3 per cent rather than the 5.2 per cent first feared – should be the main factor behind the improvement. But the focus will also be on the ONS's latest assessment of the UK's powerhouse services firms – accounting for more than three-quarters of the economy – in July.
Investec's chief economist, Philip Shaw, said: "The services index for July will give us a further steer on whether the dominant UK service sector did indeed get off to a running start in the third quarter.
"If the July bounce is significant, as it should be following June's Jubilee disruption, then we should see the level of confidence in a wider third-quarter rebound grow."Reuse content