British financial markets have become accustomed to economic shocks over the past two years.
These have tended to show a dire contraction in output or, more recently, a disappointingly anaemic recovery. But today's GDP figures confirmed a rare upward move — first revealed a month ago — showing that the economy leapt by 1.2% over the second quarter of the year, a pace of growth not seen for four years.
The casual bystander can be excused for being perplexed about how this fits into what is widely regarded to be a difficult path out of recession, not least because most economists share their confusion.
While not pretending to have all the answers, we would point out that many economies pass through a "sweet spot" as they return to growth when everything appears to go right at the same time.
In this case, companies restocked their shelves having previously run them down; construction firms benefited from a rebound from weather disruptions in January and February; and a degree of last minute, pre‑election government spending probably helped as well.
Unfortunately these episodes tend not to last long. The recovery should become self-sustaining — but we should not lull ourselves into the belief the economy is there already.
