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Good news today but a tough task awaits the next Bank of England Governor

It was an uncharacteristically cheerful governor of the Bank of England who appeared today in his last quarterly press conference before retiring next month.

I wouldn't go so far to say Sir Mervyn is demob-happy, but he did seem delighted to be able to present some good news for "the first time since the financial crisis began" in 2007.

The economy will grow a little more strongly than expected three months ago, he said, and inflation will be a little weaker.

These are indeed fractional improvements: the Bank's forecasts are for growth this year to edge higher from 0.9 per cent to 1.0 per cent and for inflation to peak this year at 3 per cent down from the last forecast of 3.2 per cent and it is expected still to remain above the Bank's two per cent target into 2015.

That really matters for workers who, as I blogged earlier today, are seeing their wages rise at the slowest rate since records began in 2001 while prices march relentlessly higher.

So spending power is being eroded month by month, year by year - in fact, a think-tank called Resolution points out that averaged weekly wages adjusted for inflation are back at the levels they were a decade ago.

Wages are rising at the slowest rate since record began in 2001.

At least they have jobs. Unemployment data were published today and showed 43,000 fewer people are in employment compared with the previous three-month period.

The almost miraculous spell of improving jobs data despite a weak economy seems to be over.

So the bigger picture is that over the medium term things will improve but Britain still faces serious problems now.

While Sir Mervyn's tenure ends with the hints of a proper recovery in sight, the economy has to cope with huge levels of public and private debt, a general lack of confidence holding back investment and, as even Sir Mervyn repeatedly points out, a big economic mess on our doorstep as the eurozone falls back into recession.

A tough task awaits his successor.

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