Recovery in sight but slow
Evidence is growing that the UK economy will return to growth in the second half of this year
The estimates for activity levels in the second quarter have been adjusted to show that activity fell by less than early data had suggested and since then there have been signs of improved activity levels on the high street, with retail sales higher in June, July and August and signs of stability in the housing market, where prices have edged higher, albeit in thin trading conditions. The consensus now is that the economy will return to growth in the second half of the year, helped initially with weak comparative data from last year but gaining strength gradually from the effects of lower interest rates, a weaker currency and increased levels of government spending. Although a return to expansion is clearly a positive the pace of improvement will be relatively slow with growth of 1 per cent or a little more in 2010. Expansion at this sort of rate will mean that some areas of the economy will not feel the benefit for some time leaving the squeeze on many charities especially those dealing with the effects of high unemployment.
Author: John Kelly
John Kelly is head of client investment at CCLA.
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