Britain's recovery prospects looked brighter today after surveys showed consumer morale jumping, employers hiring again and price pressures absent.
Official trade data added to the upbeat tone, with exports up 5 per cent in July, the fastest increase since January 2008, keeping the trade gap on a narrowing trend and boosting optimism that global trade is picking up.
Imports also rose but at a slower pace.
"The picture in the near-term is looking increasingly rosy," said Brian Hilliard, chief UK economist at Societe Generale. "Output is picking up and it appears that unemployment will peak at a much lower level than people feared."
The Nationwide Consumer Confidence index rose to 63 in August from an upwardly-revised 61 in July. That was the highest since May 2008 and reflected Britons' more upbeat view as well as a greater willingness to spend.
A separate survey by the Recruitment and Employment Confederation and accountants KPMG showed the number of job appointments rose last month for the first time in over a year.
On inflation, figures from the British Retail Consortium showed shop prices fell 0.1 per cent last month to register their first negative reading since February 2007.
There was even better news on the UK's deteriorating public finances. Ratings agency Moody's said Britain's triple-A sovereign debt rating was "resilient" and no ratings downgrade was expected in the near future, a restatement of its existing stance.
Britain still has some catching up to do with peers Germany and France, who exited recession in the second quarter while the UK contracted by 0.7 per cent.
But economists are increasingly expecting a return to growth in the third quarter.
The surveys provide an upbeat backdrop for Bank of England policymakers who kick off a two-day meeting to debate monetary policy today.
But while the BoE has acknowledged the brighter tone of recent data, it remains concerned about the strength and sustainability of any economic recovery and is not expected to change interest rates or its £175 billion asset purchase scheme this week.
Nationwide's consumer confidence index showed a broad improvement in shoppers' morale.
The expectations index, which gauges peoples' sentiment about the economy, jobs and their own finances in six months' time, rose to 94 from 91 in July - the highest since September 2007, when the global credit crunch first bit.
The present situation index edged up to 17 from 16 in July, but still suggests Britons are overwhelmingly downbeat about the current climate, with more than 70 per cent of respondents describing the employment and economic situation as "bad".
"The rise in positive sentiment across all the indices is no surprise as a number of key economic indicators continue to show that we may have reached the bottom of the current recessionary cycle," said the mortgage lender's chief economist, Martin Gahbauer.
Reuters