Strong PMI figures indicate return to growth in Q2 2013

Maybe things don't suck?

Good news, everybody! The economy may actually not be terrible forever, according to data from Markit economics.

The UK all-sector PMI, an index which measures business activity throughout the economy, indicates that growth in Britain is set to be the highest it's been since March 2011. Values above 50 represent an expanding economy and values below 50 a contracting one: for June, the PMI is 56.0. That also means that the average for Q2 2012 is 54.2, well up from the average of 51.2 for Q1 2012. In other words, expect a healthy GDP figure on 25 July, when the ONS releases its preliminary estimate.

The best news in the release, though, is the data on new business inflows. That's the amount of new orders taken on by companies, and could be seen as representing a truer picture of economic growth, because it is less skewed by fluctuations in productivity or order fulfilment. And it is the highest it's been for six years. So too is the estimate Markit gives for employment. If it follows through into the ONS statistics (unemployment figures are due 17 July), there'll really be something for the government to celebrate:

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
Show Hide image

The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.