According to the Organisation for Economic Co-Operation and Development (OECD), the UK’s economy is in better shape than any other leading nation, apart from the USA, and is on track for recovery.
Despite slashing its growth forecasts for November for the country from growth of 0.5 per cent to a contraction of 0.1 per cent, the OECD said that growth in the UK has been accelerating for the past six months and that its improvement over the last year has been the strongest of any of the group of seven nations, with a rise of 1.5 per cent, higher even than the USA’s 0.87 per cent.
The OECD’s monthly statement on its composite leading indicators (CLI) is usually an accurate predictor of change for up to six months in advance and for the past three months, the CLI reading for the UK has been above 100, indicating that growth is above its long-term trend of 0.5 per cent, having risen to 0.6 per cent a quarter.
In fact, in November, the CLI level rose from 100.5 to 100.7, which was its strongest showing since June 2011, with only the USA, which had a reading of 101, coming in higher.
Although the Eurozone is growing at below trend rate, according to the OECD, the CLI levels for Italy, Germany, France and the Euro area as a whole point to stabilisation in growth prospects, which is also good news for the UK.
However, the National Institute of Economic and Social Research (NIESR), the UK’s longest established independent economic research institute, appears to refute the Paris-based think tank’s predictions and has warned that the economy contracted 0.3 per cent in the final quarter, raising the prospect of a triple-dip recession.
As an accountant, Sarah Jenkins, specialises in management accounting, business development and financial reporting.