Britain is seeing the green shoots of a recovery, says MAGGIE PAGANO

Along with the warmer weather, there are good signs that the economy is also brightening up.

Figures out today from the British Retail Consortium (BRC) are nicely surprising, showing that both food and non-food price inflation is tumbling.

The particularly sunny spot in BRC’s shop price index for April is that non-food prices were deflationary, falling 0.6 per cent.

Overall, the index shows that annual inflation eased to 0.8 per cent in April, well below the three-month average and the lowest since December 2021. 

Both fresh and ambient food inflation was down to its lowest level for more than two years.

Positive signs: Labour market conditions are loosening which is one of the indicators which the Bank of England uses to gauge whether conditions are right for cutting interest rates

Fierce competition and heavy promotion among retailers are behind the falls, mainly in footwear and clothing, as they fight to keep customers coming into the shops.

Retailers – especially the supermarkets – are criticised for jacking up prices the minute raw material costs start rising rather than taking some of the hit themselves.

It’s difficult to know how much of today’s falling prices is due to lower input costs or promotions to keep market share. 

Or a bit of both. What’s for sure is that there is an almighty battle going on to drive consumer demand. 

If my own weekend shopping is anything to go by, the fight is becoming more cut-throat rather than letting up.

Prices at Waitrose for plants and other household products are cheaper than at Homebase. That’s quite a shift in the competitive spirit.

Along with falling prices comes a fresh forecast from Oxford Economics which predicts significant growth for the UK with the economy expanding by 0.3 per cent in the second quarter following on from the 0.4 per cent rise in the first quarter.

Oxford cites the recent flash S&P Global survey which showed the composite purchasing managers’ index – the PMI – at an 11-month high of 54.0.

And the final PMI results out soon are likely to match those flash reports, confirming forecasts that the economy is on the turn. 

Labour market conditions are also loosening, which should lead to a slowdown in pay growth – one of the red flashing indicators which the Bank of England uses to gauge whether conditions are right for cutting interest rates.

Are there enough signs that inflationary pressures are falling fast enough for the Bank to be so bold?

Inflation is unquestionably going south while wage growth is slowing. Other than the usual caveats about supply shocks from geo-political tensions, the outlook for commodities such as oil and gas look stable.

Indeed, the milder weather across Europe this winter and spring (yes, even here in the UK, despite the April rain) means that European gas storage levels stand at 58 per cent.

ING forecasts that they will be completely full ahead of next winter, and gas prices could even come down. Another excellent reason why the Bank should be ahead of the curve and cut next week.

Takeover theatre

Once upon a time, corporate takeovers were as compelling as any great West End or Broadway hit. 

The leading characters would be at each other’s throats with the most brutal language, brandishing threats and dishing out criticism about each other’s companies without fear or favour. 

The bantering would go on for months, but at least the predator would be forced into paying the highest price, allowing the prey to claim some victory for having secured the best value for its shareholders.

No more it seems. With a few exceptions, today’s corporate leaders roll over at the first sign of a shilling or lay back and wait for the offers to roll in.

Are bosses less confident than their predecessors? Or greedier? That’s the impression gained from recent takeovers, and perhaps another reason why valuations are so low. 

The bosses of Anglo American and Royal Mail should go back to some of those feisty corporate takeovers of the 1980s and 1990s to learn some lines.

Heading for Madrid

And once upon a time Puig, the Spanish family-run fashion-to-fragrance giant, might have been heading to London to get the best valuation for its IPO. 

Instead, it is listing this week on the Madrid Stock Exchange. Madrid is doing well. Spanish clothing retailer Tendam and Hotelbeds are both lining up listings over the next few months. 

It would be interesting to know whether the London Stock Exchange’s top brass pitched to chairman Marc Puig or been in contact with the others.

This post first appeared on Dailymail.co.uk