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

Recruitment Genius: Warehouse Operations & Logistics Manager

£38000 - £42000 per annum: Recruitment Genius: One of the UK's best performing...

Recruitment Genius: GeoDatabase Specialist - Hazard Modelling

£35000 - £43000 per annum: Recruitment Genius: Our award-winning client is one...

Recruitment Genius: Compressed Air Pipework Installation Engineer

£15000 - £21000 per annum: Recruitment Genius: This leading provider of Atlas ...

Recruitment Genius: Operations Coordinator - Pallet Network

£18000 - £20000 per annum: Recruitment Genius: Opportunity to join established...

Day In a Page

Read Next
 

Letter from the Political Editor: With 100 days still to go how will Cameron, Miliband and Co. keep us all engaged?

Andrew Grice
A solar energy farm in France  

Nature Studies: For all the attractions of solar power, it shouldn’t blight the countryside

Michael McCarthy
Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea