Is the recovery running out of steam?

A raft of gloomy survey data has fuelled fears that the UK’s economic recovery is running out of steam. There are some indications that quarterly GDP growth will moderate from 0.7% in Q2 to 0.5% or so in Q3 – a fairly respectable figure, but certainly not one that is going to prompt the MPC to rush into raising interest rates soon.

While disappointing, growth of 0.5% is broadly in line with the UK’s historical average and hardly a disaster. And with the domestic economy still strong and global fears likely to be overdone, we doubt this signals that the economic recovery is running out of steam.