The UK economy congtinues to show signs that it’s bouncing back nicely.
Last week saw some good numbers on the housing front, and new data indicates that the manufacturing sector is rebounding well, as its increased output for the second month in a row.
Considering how precarious the situation over there seemed just a few months ago — potentially much worse than ours — this is all great timing for the incumbent PM Gordon Brown, who clings to the hope that he can ride a turnaround and stay in office. This weekend, his own labour party (as well as liberal parties across Europe) suffered humiliating defeats at the polls.
In other big UK news, there’s chatter that the government is getting ready to un-nationalize Northern Rock, the failed bank it had to seize in the earliest days of the financial crisis. Not just that, but it’s hoping to sell it at a profit, for some kind of proof that the move was correct, and that the stewardship of the crisis has been on point. Again, the dream for Brown is that the bank can be sold before next year’s election.
Another thing to consider: All this good news is coming after S&P threatened a downgrade of the country’s AAA rating. Now, the country may not be out of the woods (by any stretch). But it’s once again clear that the agency is just behind the curve and reacting to the markets. If anything, it’s basically irrelevant. Global markets already had UK on the brink earlier this year, but are obviously feeling much better now. S&P was just last to the game.