There are some tentative signs that the economy is beginning to turn a corner. With GDP growing by 0.3% on the previous quarter in Q1, the economy comfortably avoided a triple-dip recession. And while this growth depended on an expansion in the services sector, April’s CIPS/Markit surveys suggest that the manufacturing and construction sectors might not drag on growth for much longer. Nonetheless, the recovery remains much weaker than any seen in the 20th century. And it still has significant hurdles to overcome, including an intensifying squeeze on households’ real pay from rising inflation, a deepening recession in the euro-zone and a fragile banking system.
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