Crack open the bubbly and don’t skimp on the nibbles, the UK might just be in for a better New Year than expected.
After emerging from recession in the third-quarter (largely thanks to an Olympics inspired surge) celebrations proved brief.
In recent months signs have increasingly indicated that the UK economy is likely to contract again in the fourth quarter. If it should contract again in the first quarter of 2013 the UK will be in its third recession in recent years.
However, the festive season has yielded some festive news. According to an index of business sentiment compiled by Lloyds Banking Group Plc, confidence among UK executives regarding Britain’s economic outlook for 2013 is on the up.
Trevor Williams, chief economist with the London branch of Lloyds Bank, stated that the ‘upward momentum in confidence, if sustained, would point to a return to growth in the early stages of 2013, though external risks remain.’
Although the gauges assembled by Lloyds hint at the possibility of the UK avoiding a dreaded triple-dip recession, growth is far from assured.
Williams was careful to remain cautious, adding that there was still a risk of a ‘marginally negative outturn in the headline figure due to the unwinding of Olympics related consumption.’
Lloyds’ report showed a gauge for measuring the economic outlook rose from 17 to 20, in line with ‘broadly flat underlying growth’ while an index of business sentiment increased from November’s figure of 35 to 40 in December.
The banking group has used these improved sentiment indexes to reduce the probability of a third UK recession from 17 per cent to 11 per cent.
As of 11:30 am
The Pound to Euro exchange rate is currently trading at 1.2254
The Pound to US Dollar exchange rate is currently trading at 1.6172
The Pound to Australian Dollar exchange rate is currently trading at 1.5587
The Euro to US Dollar exchange rate is currently trading at 1.3192
The Euro to Pound exchange rate is currently trading at 0.8157