Ignore doomsters, new ‘Global Britain’ IS bouncing back after the pandemic
AS Tory politicians knock seven bells out of one another in the Westminster village, Britain’s businesses and workforce are actually getting on with the job of ensuring that the economy and trade keep growing.
The latest data shows the economy is defying the doomsters and continuing its post-Covid recovery in spite of inflation.
Much has been made by Remainers of the apparent self-harm done to UK plc by Brexit. Yet the nation’s exports to Europe are surging as a result of the persistence and ingenuity of British firms which have overcome many of the early obstacles.
The data for May shows exports of goods to the EU climbed to a staggering £1 .9billion — the highest level since the Office for National Statistics (ONS) started collecting the data in 1997.
Even if the impact of inflation is stripped out, exports are back to levels last seen in December 2020. As impressive as the improvement in trade performance is the total output of the economy, or GDP.
THIS advanced unexpectedly by 0.5 per cent in May, confounding much of the economic establishment which was predicting a flat-lining economy.
Not only that, the ONS has revised up the numbers for earlier in the year. Encouraging as it is that Britain’s full employment economy and output are strong when EU manufacturing is stumbling, there is a possible downside. The Bank of England may see the country’s robust economic performance as a chance to raise interest rates by as much as half a percentage point when it meets next month to control runaway inflation.
The Bank has predicted it will hit 11pc in the autumn unless action is taken.
At Westminster it is possible that the performance of the economy could inject a note of reality into the Tory leadership contest where the opponents of former chancellor Rishi Sunak have been falling over each other in the fight to burnish their tax-cutting credentials.
The data shows that in spite of inflation and the outbreak of industrial disputes on the railways and elsewhere, business confidence looks to be holding up.
The American investment bank Goldman Sachs has upgraded its forecasts for this year and believes that the UK has very good odds of avoiding a recession.
The reality contrasts sharply with Labour’s constant attacks on the Government in which the party quotes an OECD survey suggesting Britain is the weakest of the industrialised economies bar Russia.
CLEARLY, a health warning must always be attached to any one month of data. But the trade figures also suggest that the UK is fully embracing the ‘global Britain’ narrative. The value of exports to the rest of the world jumped by 17.1 per cent in May.
And while Britain is still running an overall trade deficit, the gap is narrowing.
Among the biggest drivers of domestic growth was a recovery in health services. But it was also a strong month for logistics, such as road hauliers, and spending on travel in spite of the airport snarl-ups.
Overall, Britain is in a much better place than you would recognise from much of the public commentary — whatever the critics of Brexit and the government like to claim.