Bank of England says recovery has "finally taken hold"

I would be the first to agree that we cannot afford an atom of complacency about the economy and that the recovery will have to go some way further before it starts feeding into people's living standards.

Nevertheless I think we can afford to be pleased with the statements made by the Bank of England in their latest Inflation Report.

(Incidentally, unlike the link on the BBC news website, the link above takes you to the November 2013 report and not the February 2012 quarterly report.)

The Bank of England's governor Mark Carney says that UK recovery has "taken hold" and he now thinks it likely that unemployment will fall sooner than the bank  had previously forecast.


Growth for this year is now forecast to be 1.6%, up from 1.4% as previously projected, and for next year, annual growth is expected to be 2.8%, rather than the 2.5% the Bank predicted in August.

The report said: "In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand."

As the BBC's economics editor, Robert Peston, put it,
 
"It is quite difficult to remember when the Bank of England sounded so positive”
 
Peston then manages to get himself into a circular argument about whether the recovery is too robust and whether this might force the Bank to raise interest rates and choke it off again.
 
Not from where I'm sitting it isn't Robert - I'm pleased the recovery is as robust as it is but I think we have a long way to go before it is too strong.
 
The sort of words being used to indicate that recovery is under way are statements like this one from Mark Carney:
 
"For the first time in a long time, you do not have to be an optimist to see the glass is half full"

It's good that we've reached that kind of position but Britain is light-years away from an overheating economy at the moment.

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