Britain’s speedy recovery has proved the doomsters wrong, says ALEX BRUMMER

Well, that didn’t last long! The doomsters who wallowed in the idea that Britain was in recession in the second half of 2023 should know better.

Britain may lack the dynamism of America but we should never underestimate the resilience of our services sector, which accounts for almost 80 per cent of output and came surging back in January.

That is not to say that UK growth prospects in 2024 are glorious.

But anyone tracking the mood of enterprise and how well business and financial services are doing around the globe might be inclined to think that last week’s Budget forecast of an expansion of 0.8 per cent in 2024 may prove too gloomy.

None of this will stop Opposition politicians from claiming Tories crashed the economy. 

Recovery: Britain’s services sector, which accounts for almost 80% of output, came surging back in January

It will give Conservative candidates a better narrative to take to the country: even if voters have had enough of Rishi Sunak.

The main drivers of the January uptick of 0.2 per cent are retail and a return to housebuilding. 

In spite of the Bank of England reporting rising mortgage arrears, the era of more normalised interest rates is doing less harm than imagined.

The prospect of a first reduction in the cost of borrowing, by June, remains alive irrespective of difficulty in suppressing inflation in the US. 

Having cut national insurance twice in four months – so as to make work pay better – Jeremy Hunt is on a mission to do more.

He has not given up on the idea of abolition in the face of claims of a £41billion cost.

The public needs to be reminded that national insurance contributions (NICs) may determine state pension entitlements but are not ring-fenced for the NHS, benefits or anything else. 

It is simply a tax on payrolls and the case for abolition or blending with income tax is well established.

Mythology about NICs explains why so far the Chancellor has had little cut-through with his reductions and pledge of much more to come.

Confidence trick

Challenger banking on both sides of the Atlantic is in flux.

In the UK, Tesco Bank was sold to Barclays, and Nationwide needs to persuade members that buying Virgin Money is a good use of reserves. 

Metro Bank, under the tutelage of Colombian owner Jaime Gilinski Bacal, is looking for a way back.

On the other side of the pond former Trump-era treasury secretary Steve Mnuchin has emerged as white knight for troubled lenders, pouring $1billion (£780million) and new leadership into New York Community Bancorp, which is struggling with real estate losses.

Metro is having some success in stemming the flow of red ink after lay-offs and an end to its unique selling point of seven-day-a-week branch openings.

Savings outflows are being stemmed by bolstering the rates paid to savers and overall deposits have risen 1 per cent to £15.62billion since June. 

Everything comes at a cost and, amid fierce competition in the home loan market, there are questions as to when and how profits can be restored.

One possibility is a drive-by shooting, as former Royal Bank of Scotland boss Fred Goodwin described it in the Noughties.

However, the Big Four banks, which seek to escape branches, are unlikely to weigh in. Banking is all about confidence.

Mnuchin’s presence already has done wonders for New York Community Bancorp. The route back for Metro is slow, winding and more treacherous.

Saudi swoop

The sporting ambitions of Saudi Arabia’s sovereign wealth fund PIF are unlimited.

The Telegraph reports that, following its incursions into football, boxing and golf, it now has its eyes on tennis with a proposal to merge the men’s and women’s tours.

Terrific to see Riyadh, not known for promoting the rights of women, weighing into the equality space.

Where this leaves CVC, pioneer of sports finance, which last year injected £150million into the women’s tour, is unclear.

What is certain is that finance, streaming rights and social media are transforming sports ownership for ever.

This post first appeared on Dailymail.co.uk