The Economy

Goodwood was truly glorious this year, and just as the sun has been shining in West Sussex, so the clouds over the economy appear to be clearing as well.

There was further encouraging news this week.  Growth of 0.6 per cent - double that in the first half of the year - has confounded predictions.  And it now seems there wasn't a "double dip" recession after all.

Sales of new cars from Britain's resurgent motor manufacturers have now risen for 17 months in a row, while official figures show that total factory output jumped 1.9 per cent in June.

All 13 sectors of British manufacturing - including food and drink, computers and aircraft - expanded in a single month for the first time in over two decades.  The housing market appears to be moving again.

This week Mark Carney, the new Governor of the Bank of England, indicated that our historically low interest rates - helpful for businesses and those with mortgages, if not for savers - will remain at 0.5 per cent at least until unemployment falls below 7 per cent.

That target is probably three years off, but unemployment is already much lower in the UK than in many other Eurozone countries.  In the Arundel & South Downs constituency we are fortunate that it is lower still, at a rate of just 1.4 per cent.

It is striking that the improved news on the UK economy is coming across a wide range of sectors.  The Governor said that the recovery was broadening.  But he also cautioned that it remains weak by historical standards.

And times remain tough.  The impact of the sustained downturn has been felt as wages have not risen with the cost of living.

The Government has been trying to help.  Since April, around 38,000 people in this constituency have been paying less income tax - £600 less than at the last election - and around 3,200 have been taken out of income tax altogether.  Council tax has been frozen and action on fuel duty has also been of particular help in our rural area.

We are not out of the woods yet, but the better news this week indicates that Britain is on the right track.  Tellingly, those who so vocally opposed austerity, arguing that we needed to spend and borrow more, have suddenly gone rather quiet.