WHEN Sir Mervyn King, the respected outgoing governor of the Bank of England, said: "A recovery is in sight" yesterday, it was a cautious statement, delivered as ever with the solemnity of a stern sermon on a wet Sunday morning.
His growth forecast, however, appears to justify tentative optimism about the ailing economy.
Coming after better-than-expected GDP figures three weeks ago, important principally for showing that the UK had avoided a triple dip recession, could this indicate that the patient may soon be discharged from intensive care?
Not quite. Growth will be stronger and inflation a little weaker over the next three years than was previously forecast, the first time Sir Mervyn has been able to say that since before the financial crisis, but while growth will be "sustained" over that period it will also be "modest". Inflation will remain above its 2% target for at least the next two years, so the squeeze on sluggish incomes is set to continue.
"This hasn't been a typical recession and it won't be a typical recovery," said Sir Mervyn. It may be growth, in other words, but not as we have previously known it.
Mr Osborne's claim last night in a speech to the Confederation of British Industry that "our plan is working", then, is a generous self-assessment.
The fragility of the improvement, coming after years of economic gloom, does not amount to a vindication. Recovery may well have been swifter and deeper had he taken a less hardline approach all along.
News that joblessness is falling sharply in Scotland possibly gives some indication of how the UK as a whole might stand if the Chancellor had eased up a little on his austerity policy. The Scottish Government hailed what it says is the largest quarterly rise in employment on record, an increase of 54,000 in three months.
The rise, contrasting with a fall across the UK as a whole, is probably linked to the fact that Government spending cuts have been applied less harshly in Scotland.
It is certainly very heartening news; for each individual who has experienced the misery of unemployment, the fact of collecting a regular pay packet makes the world of difference.
It must be acknowledged, however, that the Scottish Government's decision to defer cuts for a year in 2010, may also have deferred some of the impact of those cuts. The Scottish Government's budget is projected to continue falling until 2017; consequently, there may be a rise in unemployment still to come.
In some sections of the Scottish economy, meanwhile, there has been less cheering news. The value of Scottish retail sales last month was down 2.1% on April 2012, a significantly steeper year-on-year fall than in the UK as a whole.
Even taking into account the effect of poor weather on summer clothing sales, the figures are disappointing. The overall picture for the Scottish economy, then – as for the UK economy – is mixed.
There are many challenges ahead, not least continuing problems in the eurozone. It is to be hoped, though, that the recovery has truly begun in earnest.
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