WHAT a difference a bit of sunshine makes.

Only six weeks or so ago, Britain appeared to be headed for a triple-dip recession. The UK had lost its Triple-A credit rating. The Tories were heading for defeat. David Cameron's leadership was hanging on the shoogly peg, while Boris Johnson awaited the nation's call. Alex Salmond was calling on Scotland to bail out of the sinking ship.

Now suddenly it is "Boom Britain", according to the London press, and David Cameron is "coasting to victory" in 2015, according to one broadsheet. Is this all silly season euphoria? Can basket case Britain, with Greek-level debts, a cratered banking system and dwindling exports really be booming? Have weeks of gushing over the royal baby robbed a sceptical media of its critical faculties?

The first thing to say is that if confidence is returning to the economy, then that is a good thing. British businesses are sitting on a huge cash pile of around £700bn which they have been refusing to invest while the economy flat-lined. If a few good headlines can persuade them to put some of this to use, then that can only mean more employment and better living standards.

So, I'm not going to do the usual journalist Jeremiah thing of writing off optimism as naive and self-destructive. What John Maynard Keynes called the "animal spirits" of business are essential to any economic recovery. If the triple-dip recession really has been avoided, and Britain is going through a recovery, then this will produce the taxes that fund essential services like the NHS, education and infrastructure.

And the positive news is that, in June, just about every sector of the economy delivered better than expected returns. High Street shops that have been on the point of closing their doors before Mary Portas descended upon them are suddenly finding that clothing and consumer goods are, if not flying out the door, no longer gathering dust in the stock room.

Britain's battered manufacturing industry registered a higher than expected increase of 2%, according to the Office of National Statistics. Services grew at their highest rate in six years; car sales increased by 13% in June; house prices rose at their fastest rate in three years.

Readers of this column will not be surprised to learn that I do not regard rising house prices as a sign of economic health. There is a housing crisis in Britain, and speculative gains are being made at the expense of young families trying to put a roof over their heads. However, there is no doubt that a certain section of the population feels more confident about spending if they think the value of their house is increasing.

Nor do I think that relying on the sale of motors - what Margaret Thatcher called "the Great Car economy" - is a viable strategy for the economy or the environment. Nevertheless, the sight of all these new number plates suggests that some people have money and are prepared to spend it.

But if, as Labour says, families in Britain have lost around £1300 in real terms since 2010, and that real wages are no higher today than in the year 2000, where is all this cash coming from? The TUC issued a report yesterday claiming that the money fuelling the economy is illusory and people are simply borrowing, like they did in the years before the crash in 2008. The rate of household savings has dropped by 43% in the past year, as families try to cope with rising prices.

People have stopped saving for the very obvious reason that, with interest rates at near zero, there is little point in doing so. Anyone who has been putting money aside (remember how all those finance gurus and Government ministers were urging us to all acquire the "saving habit") has been robbed by inflation. Or by the pensions industry, or perhaps both.

In our zero-hours, low-pay, part-time economy, there has been no increase in earnings that could possibly explain the turnaround in manufacturing and retail sales. Nor have exports been leading the recovery, though of course many of Britain's motors, like the Mini, are built for export. Comparisons with the export-led boom that followed the 1992 recession are not justified. That marked a genuine rebalancing of the British economy.

So what is happening? Well, in short, the Government is preparing the ground for the next General Election. David Cameron and the Chancellor, George Osborne, realised that they faced defeat in 2015 unless they did something dramatic, so they resorted to that flexible friend for Chancellors in difficulty: the housing bubble.

The Funding for Lending scheme last year handed nearly free money to banks if they agreed to lend some of it, which they have, to people looking to buy houses. Meanwhile, the Help for Buying scheme has used public money effectively to subsidise the deposits of home buyers in the south-east of England. In case you had forgotten, your hard-earned taxes are now being put to good use by lending up to £90,000 of free money to people seeking to buy houses worth £600,000.

This has stimulated the housing market, and led to a 3% increase in house sales. When people move house, they buy stuff - paint, wallpaper, beds, roll-top baths, wet rooms and the like. This is why consumer spending is taking a hike upwards. This spills over into a general sense of "things moving again", and encourages people who have been putting off the big-ticket items because of the recession to think again. The second-biggest ticket after the house is usually the car, and that's why registrations are up.

Meanwhile, savers continue to be robbed by inflation, with the new Governor of the Bank of England, Mark Carney, promising yesterday to hold interest rates at 0.5% - the lowest in 300 years - until unemployment falls below 7%, which could be rather a long time. People are being positively invited to borrow their way out of debt. Clever credit companies like Wonga have moved into this area in a big way, realising that a new generation is being lured into the debt trap and will require their services down the line.

But besides all of that, the most important reason for the recovery is: Europe. Yes, the inconvenient truth for Conservatives, most of whom loathe the EU and want to leave, is that what recovery there has been in Britain has largely been a result of the sovereign debt crisis in the eurozone dying down. The lack of confidence in the British economy was closely bound up with worries about the imminent financial collapse of countries like Greece, Portugal, Spain, Italy. Somehow, they are still standing, and the eurozone countries appear to be stabilising.

Anyway, eventually, everyone gets tired of austerity chic. Newspapers are looking for a new story, and "Britain bounces along the bottom" - which is actually what is happening doesn't make for a snappy headline. The sunny weather has made everyone feel just a little bit more confident. I predict that it'll last until, oh, June, 2015 at least. So, enjoy.