Jim Armitage: We're feeling better but let's hope the recovery continues

Outlook It would be churlish not to cheer the economic good news that has emerged this week. The unemployment picture is particularly heartwarming, given that each number off the dole list is a household with more wealth, self-respect and happiness.

We should not even be overly concerned about speculation that interest rates will rise any time soon. The Bank of England Governor, Mark Carney, has only said unemployment falling below 7 per cent will signal the start of a review on interest rates, not be the trigger for an instant rise. Inflation at 2.2 per cent strengthens the argument of the cost of borrowing doves, and the Bank's inflation report yesterday lowered long-term inflation forecasts. Mr Carney and Co will not be putting up rates until the broad economic recovery is certain.

We should now be concerned more about how sustainable the bounceback in economic markers such as employment is. Few company bosses talk of the kind of dramatic improvements the Government statisticians are coming up with. The Chartered Institute of Personnel and Development, the association for the human resources trade, yesterday predicted a cooling of the jobs market in the coming months.

It said employers want to focus on getting more work out of existing staff, rather than keep hiring new ones. As for pay rises, forget it, the CIPD added. Most organisations are keeping those on hold until the second half of next year "at the very least". By the time of the next election, a 'feel-better' factor may be in play, but Dr Feelgood will not be calling until long after the next Parliament.