Recession fears ease as economy returns to growth

Amid all the concern that the UK is heading for a downturn, a bounce back of sorts.

The economy grew in July - and by more than expected, activity expanding in spite of the political turmoil.

Last month we learned that between April and June the UK economy contracted by 0.2% compared with the previous three months, putting us on the edge of a technical recession.

But growth of 0.3% in July reduces the likelihood of a second successive quarter of falling output.

All the main sectors of the economy returned to growth. There’s some evidence that activity was driven, in part, by businesses preparing once again for the prospect of a no deal Brexit.

The UK has experienced recessions roughly once a decade since World War Two. The last one was eleven years ago but that doesn’t mean another one is overdue; unlike buses, downturns don’t run to a timetable.

The chances of a recession this year have eased, but we won't know if we’ve avoided one until November, when we find out how the economy performed in August and September.

Our great strengths are that there are a record number of people in work and that pay growth is strong.

Our great weaknesses are that productivity growth and business investment is feeble.

Most economists expect the UK economy will continue growing, for now at least. But their forecasts are based on the assumption that our departure from the EU will be smooth.

That’s a brave assumption.