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The Governor of the Bak of England
Governor of the Bank of England, Mark Carney, said: ” A recovery may be gaining pace but our economies are a long way from normal”

In his address to the Economic Club of New York On Monday, the Bank of England Governor Mark Carney painted a cautiously optimistic view of the UK economy.

‘A recovery may be gaining pace but our economies are a long way from normal,’ Carney said.

Indeed, his speech had many notes of caution not least for the UK housing market: ‘But there is a history of things shifting in the UK and the housing market of moving from stall speed to warp speed and underwriting standards slipping. So we want to avoid that,’

In early December the independent Office for Budget Responsibility said that the UK is set to grow 1.4% in 2013 and by 2.4% in 2014. Both figures were more optimistic than any other previous figures this year.

So how is the UK economy performing? The recent economic signals – which all politicians, analysts, investors and traders look to– have been encouraging.

According to the latest GDP estimate by the National Institute of Economic and Social Research the UK economy grew by 0.8% in the three months to the end of November– compared to a 0.7% increase in the three months to the end of October.

Figures from the Office for National Statistics showed UK industrial production climbing by 0.4% in October, which might have been less than the 0.9% growth seen in September but it was better than the 0.3% growth analysts were expecting.

The latest construction and manufacturing PMIs both rose in November with the former up to 62.6 from 59.4, and the latter rising to 58.4 from 56.5.

However, other data suggests that the new Bank of England chief has due cause for a little concern.

November’s services PMI – a sector that accounts for around 80% of the UK’s GDP– declined more than expected to 60 from 62.5 previously.

On the housing front, the Royal Institution of Chartered Surveyors’ House Price Index climbed to a reading of +58 in November which was the highest for 11 years.

Prior to this, figures from Halifax, now owned by Lloyds, showed that UK house prices climbed again in November by 1.1% from the previous month. During the three months to November House prices were 7.7% higher than they were in the equivalent period a year before.

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