Remember Alastair Darling's budget? Yes, I know, what with Damian McBride and dodgy expenses and leadership crises and all, it seems like a long time ago, but it was actually only April 22. There were criticisms from all sides, but on one thing just about everyone was agreed: Darling was every kind of imbecile and liar for daring to suggest that the UK economy might start to grow again before year end. Vince Cable even went so far as to suggest that the Treasury had reverse engineered its economic forecasts to match its borrowing projections, a ludicrous idea when you consider how dire the borrowing projections were. I blogged about this at the time, suggesting that the Treasury's unshabby forecasting record perhaps entitled it to a bit more respect.
Well, guess what? The NIESR said yesterday that it thinks the UK recession might already be over. It estimates that real GDP grew in each of the past two months. This seems to be supported by the unexpected increase in industrial production, cautiously positive trend in retail sales, signs of improvement in the housing market (oh joy, gazumping is back in parts of London) and so on. The economy isn't out of the ditch yet; there's a possibility of a "W-shaped" recovery, with the current positive signs giving way to a fresh slowdown, if credit remains tight. For now, though, it's performing much more in line with the forecasts of Darling and his team than those of the mass media and the political opposition. I'm sure we won't have to wait long for Vince Cable et al to apologise to the Chancellor.
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