Since good news in economics has been so scarce lately, it is worthwhile to focus on it when it does present itself.
The Office for National Statistics (ONS) said this week that the economy expanded by 0.1% in November.
Although the rise in the gross domestic product is not very significant, it is much better than economists had anticipated — a decrease of 0.2%.
And what it suggests makes it important.
If the GDP doesn’t shrink by 0.4% in December, the UK may be able to avoid a technical recession.
This is no little accomplishment. One of the largest price shocks in recorded contemporary history is currently upon us.
Since a recession is typically defined as two consecutive quarters of contraction, the majority of economists, including the Bank of England and Office for Budget Responsibility, predicted that the economy would contract in the fourth quarter of the year, which would mean that we had formally entered the R-word.
It is now highly likely that Britain escapes that outcome — at least temporarily.
Whether or not the UK is affected by this rather arbitrary economic phenomenon, its economy is still only moderately expanding, therefore that last sentence is crucial.
The stress on households is still present and is expected to last for some time. November’s increased growth was largely due to World Cup-related bar and hospitality spending.
However, these economic data could signal the start of a more encouraging tale for the UK economy when combined with other encouraging news, such as the decline in wholesale gas costs and the stability of profits at numerous top consumer-facing businesses.
What remains to be seen is how long that optimism persists.
