Europe and oil prices will settle our recovery chances

Share

The thing about economic recoveries is that they never feel like recoveries until the turning point is long past. That is because any national economy is a huge and complicated endeavour.

So even in a boom there will be sectors and regions that are finding it tough, and even in a slump there will be pockets of growth. If the pluses outnumber the minuses that is growth; if they don't that is recession.

The flip between the two is always hard to measure and the data is invariably revised, sometimes years after the event.

So the best way to catch a feeling for what is really happening is to focus on the hard numbers that tell us about different chunks of the economy: what people are doing, not what they say. One such figure is the VAT revenue, because it is levied on half of all consumer spending. That is running three per cent up year-on-year. Since inflation is up 2.5 per cent, that suggests 0.5 per cent of real growth, something but not much.

The job figures are rather better, for the private sector seems to be creating two jobs for every one lost in the public sector. Here the hard number comes in the form of national insurance contributions, running up 5 per cent on last year.

There are, however, other numbers which are not so good, including exports to Europe, and income and corporation tax receipts. Partly as a result of these tax shortfalls, the Government's overall finances have deteriorated sharply.

There are two pitfalls ahead: further weakness in Europe and uncertain oil prices. But there is also a reasonable possibility that inflation will fall below 2.5 per cent. If it drops below two per cent and earnings continue to rise at about that rate, real incomes will start to rise. The squeeze will ease – and many will feel not before time.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Web developer (C#, MVC4, HTML5, CSS3, Javascript, Jquery)

£30000 - £44000 per annum + Bonus+Benefits+Package: Harrington Starr: Web deve...

Senior Automation QA Engineer (Java, Selenium WebDriver, Agile)

£40000 - £65000 per annum + benefits+bonus+package: Harrington Starr: Senior A...

Web developer (C#.NET, ASP.NET, MVC3/4, HTML5, CSS3, JAVASCRIPT

£35000 - £45000 per annum + benefits+bonus+package: Harrington Starr: Web deve...

ETL Developer (SQL, C#, VBA, Finance, Risk, Hybrid, RDBMS, Jas

£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: ETL Deve...

Day In a Page

Read Next
Indian Prime Minister Narendra Modi addresses the nation on the country's Independence Day in New Delhi, India  

With Modi talking tough and Sharif weak, the India-Pakistan love-in could never last

Andrew Buncombe
At the time of the investigation Patrick Foster published a statement on Twitter, denouncing the “unnecessarily heavy-handed police investigation”  

Long-term bail allows lazy police and prosecutors to leave cases to gather dust

Oliver Wright
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment