It is hard to believe that a year has passed since London put on the greatest of the greatest shows on earth. There has been much made since of the legacy of those heady days in the East End. For me the legacy is irrefutable. I say that with great feeling as I struggle to turn the cranks one more revolution on the painful path from sedentary ex-athlete to fully fledged MAMIL (middle aged man in lycra for those unfamiliar with the acronym).
Yes, I have been bitten by the cycling bug in a big way. As I set out on this latest 30 mile training ride my mind wanders (it’s one way of ignoring the burning in my legs less than a mile in). I am not thinking about joining Wiggins, Froome or Cavendish in pedalling glory for Britain. Instead I am thinking about my new found love as a metaphor for the UK economy.
The now clichéd saying ‘no pain, no gain’ has never been more apt. For me it is ingrained after a youth spent pounding the streets of Kent attempting to become the new Seb Coe. For the UK economy it has been a more recent reality. The economy has had to restructure and has been through the mill with the spectre of double or even triple dip recessions looming large. Economic stats have been a mixed bag and have served to consistently knock consumer and corporate sentiment. Yet, and without being political at all, the policy path has been maintained and now would appear to be bearing fruit – ironically aided in some-part by widespread British sporting glory and sunshine a plenty.
This has led to a debate about whether the UK economy has reached ‘escape velocity’ the pace required by economies if they are to enter into sustained recovery. New Bank of England Governor Mark Carney feels that is premature but the belief in escape velocity is gaining well, err, velocity. Now I am not sure what constitutes escape velocity precisely, but I am pretty sure it’s more than the pathetic 17mph that I am managing on my rides.
Much like cycling, economic recoveries are all about momentum. Keep turning the pedals, build momentum and stronger performance will pursue. On this basis things look promising with a palpable sense that the economic recovery is deepening and broadening. What is more it is reflected in not just sentiment and gut feel, but in actual statistics. In just a matter of days, there has been positive news in terms of manufacturing output (with growth across all sectors for the first time since 1992), retail spending, service sector PMI figures, and (as is required for anyone in England to truly believe) increased house prices. All this has led Mr Carney, to upgrade the UK growth forecast to 1.4% for 2013. Naturally one is cautious given recent history. One swallow does not make a summer. We will need further evidence before the bunting comes out but the signs are good (unlike the road sign indicating I have a 1 in 4 climb ahead).
Of course velocity will be gained by stronger levels of investment (though I personally will refrain from negotiating with Mrs E for a new bike!). In this respect, British business leaders appear set to finally turn the pedals faster. The most recent Deloitte CFO Survey showed that
- UK CFO optimism is now above the long term average, having risen for the 4th consecutive quarter
- Almost half believe now represents a good time to take risk onto the balance sheet
- Expectations for hiring and investment are back to 2011 levels
- UK facing businesses are more expansionary than at any time in the last 2 years
So with momentum comes increased strength. On that basis I am looking forward to my next ride – a 50 miler. It’s all part of my personal progress towards a Kent to Paris charity ride in the new year. With that in mind and with many more miles to do, my attention will soon turn to riding conditions on the continent.