Sound bites: still too early to get excited about UK industrial rebound

The UK industrial output data underline that it is far too early to get excited about a vigorous rebound in the UK real economy. Recent economic surveys may be pointing to stronger recovery, but there is still a wide gulf between sentiment and what is slowly evolving in the real economy. The UK is still on a long slow road to economic revival after the twin recessions and there is not going to be any miracle turnaround to fast track growth for the foreseeable future. UK economy suffered untold damage in the wake of the credit crunch and it is going to take many years yet before the all-clear is sounded. Chancellor Osborne was quite right to caution about getting carried away with too much optimism about the economy. Bank of England Governor Carney’s low rate strategy looks well intact for the time being. There will be no early upward adjustment to UK interest rates. The markets have been getting too carried away with talk of early UK rate hikes and policy tapering, so the pound is long overdue a short term downward correction.