Confidence in the recovery strengthens

The economic recovery is becoming more entrenched, with GDP confirmed as having grown by 0.7% in Q2 and expansion evident across all three main sectors of the economy. Meanwhile, sentiment has risen to levels not seen since the late 1990s. And although September’s CIPS surveys softened slightly on their very high August levels, they still point to the economy growing by over 1% in Q3. The surveys also continue to suggest that output growth is outstripping rises in employment. So a productivity-led recovery looks in train, which should hold back falls in unemployment and keep interest rates low for some time to come.