There was time for a brief moment of schadenfreude when it was revealed that Germany fell into recession in the first quarter of this year.
For some time now, we have been hearing from Euro enthusiasts, including the Labour leadership, a version of events which says the Tories crashed the economy.
Not it seems as badly as Berlin, with the UK avoiding a slump and both the Bank of England and IMF rapidly revising UK expansion projections for 2023.
Admittedly, the differences are fractions of a percentage point.
Yet the resilience of UK business and consumers in the face of the energy price shock is remarkable.
Latest rapid data from the Office for National Statistics shows retail footfall up 105pc on the previous week, energy prices down 16pc and job adverts strong.
There is evidence that the number of left-behinds – the 16 to 24-year-olds not in education, employment or training – fell in the first quarter, with 26,000 finding jobs.
Before anyone celebrates loudly, the public should pay attention to the gilts market. The Bank of England’s floundering performance over inflation is looking as toxic as the Liz Truss-Kwasi Kwarteng mini-Budget last year.
Yields (the interest rate return) on two-year UK bonds have risen a half a percentage point this week, leading L&G, the UK’s top asset manager, to warn against investing in gilts, which should be regarded as the safest investment to be made.
Nationwide has lost no time in lifting the cost of new tracker and fixed-rate mortgages by 0.45 of a percentage point, effective from today.
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The climbing yields are an arrow aimed at financial stability.
People whose fixed-rate mortgages are ending face a price shock – we can expect renewed focus on the liability-driven investments used by pension funds and rumbles outside the regulated banking system.
The stress may pass. After all, a US debt default hovers on the horizon.
But there can be no complacency.
Arm harm
The fate of Cambridge-based Arm Holdings had it been bought by US advanced semi-conductor champion Nvidia for £32billion is impossible to know.
Competition authorities were concerned that Arm’s open architecture model, allowing all-comers to license its smart chips, would be harmed by Nvidia.
What’s now clearer is that if Nvidia had triumphed, it would have scooped up Arm’s intellectual property and gateway to artificial intelligence (AI) at a bargain price and would have probably disappeared into a semi-conductor behemoth.
Stock in Nvidia has soared after it surprised Wall Street with a stonking second-quarter forecast of 50 per cent higher revenues than anyone estimated.
Wall Street failed to draw a connection between the sudden escalation of interest in AI, the chips needed to fire it up and Nvidia’s capacity to churn out advanced semi-conductors.
Nvidia chief Jensen Huang moved it from being the darling of chip creation for the booming computer games set, long before AI and ChatGPT was on everyone lips.
Wall Street broker Bernstein described the upgrade of prospects as ‘cosmological’ and the shares, appropriately, soared into the stratosphere, putting a value of near-$1trillion on the enterprise.
As part of SoftBank, it is hard to get a grip on what all this means for Arm. It says on its website that it has the capability to process data in a way which extends the benefits of AI to all connected devices.
If so, then it is hard to imagine that there will be anything but a voracious demand for Arm stock when it lists in New York.
The opportunity to become a tech superpower has been hopelessly mishandled by successive, inattentive Tory governments.
Life savers
Recognition of the life sciences is critical as Britain seeks to reboot the economy.
So full marks to Chancellor Jeremy Hunt for recognising the opportunity the UK has to speed up clinical trials and bring new compounds to market.
Whether the £650million committed is enough to make a real difference is questionable.
It is also disappointing that the Government was nowhere to be seen when Britain’s pharma and oncology champion AstraZeneca decided in February to move its next manufacturing facility from Macclesfield to Dublin.
That is a cost of high headline tax rates.
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