You may have seen in the media that The Bank of England has upgraded its economic growth forecast and said that inflation should fall faster than previously predicted., which brings with it a much needed glimmer of hope to UK businesses. The UK economy returned to meagre – but better than forecast – growth in the first quarter of 2013, averting the prospect of a triple-dip recession.
According to the first estimate of gross domestic product (GDP) by the Office for National Statistics (ONS) there was overall growth of 0.3% in the period – driven by the service sector, although construction remained in the doldrums. The figures also showed that the impact of the long cold winter was not as bad as feared, with weather-hit trading on the high street offset by a boost in energy demand as households ramped up their heating
Alongside this news it was announced in April that new car sales rose for the first time in 18 months. This is an industry that is often used as a key indicator of the state of the economy as cars and houses are the two biggest purchases households tend to make. Their fluctuations are therefore a good indicator of the ‘true’ state of household demand (ie, showing where households put their money, as opposed to what they say they feel). April 2013 saw a total of 163,357 new car registrations, up a huge 14.8% on April 2012 and the best figure since 2008. These sales figures are not being driven by fleet buyers but by private motorists – private sector registrations grew by 32.3% in April and are up by 15.2 % year to date.