The recession in the UK is coming to an end, with a gradual recovery expected in the second half of the year. It now seems that stocks of goods and materials were run down sharply in the first half of the year. This is a common occurrence at the low point of the economic cycle, leading to a spontaneous upturn once the stock adjustment is complete.

This time the recovery is being helped by a rise in exports. Looking ahead to the first half of next year we expect the recovery to be reinforced by renewed growth in consumer spending, but we may have to wait rather longer for fixed investment to pick up as well.