Such claims are perhaps less surprising than they appear. All 37 independent forecasting groups which provide GDP forecasts to the Treasury expect UK growth to bounce back in 2013. Most believe that the UK's double dip recession is drawing to an end and that growth will resume in the first quarter of next year.
The crux of the Economist's argument is that the UK consumer, having suffered a terrific battering in the last 4 years is turning the corner. The majority of economists take the same view, and with good reason.
Most of the big tax rises are past. Sharply lower inflation – CPI inflation has almost halved in the last year to 2.5% - should lend additional support to consumer spending power. Meanwhile the labour market has remained unexpectedly strong, with employment rising over the last three years as job growth in the private sector has outstripped public sector job losses.
These factors are supporting consumer spending power. Real disposable incomes have risen 1.7% over the last year having declined through 2011. And consumer spending is rising once again. Given that consumer spending accounts for over 60% of the UK economy an upturn in consumer activity should lend significant support to growth next year.
So the Economist's view that the worst is probably passed for the UK are not particularly radical.
In our view the real test is whether the longer-term outlook for growth is getting better or worse. The news here is not encouraging. Average or consensus forecasts for UK GDP growth for 2013 have dropped from 1.8% to 1.3% in the last four months. 1.3% is a pretty weak rate of growth for an economy used to growing at 2.5% a year. Our guess is that most economists would say that the risks to their growth forecasts lie on downside.
Much of the problem lies outside the UK. Last week the euro crisis moved back centre stage. Hopes that the recently announced bond buying programme by the European Central Bank would crack the euro's problems have dissipated. Meanwhile the US is on course for sharp tax hikes and cuts in public spending in three months time. Unless politicians strike a post-election deal the so-called fiscal cliff could derail America's recovery. Such external uncertainties constitute a significant drag on a UK recovery which is widely expected to be powered by demand from abroad for British exports.
The third quarter CFO Survey, due to be released next Monday, provides a fascinating insight into how big corporates are responding to this world of heightened uncertainty.
The UK's double dip recession seems to be drawing to an end. Growth should pick up next year. But, as events in Europe remind us, plenty of things could go wrong. For now we seem to be heading for a shaky, tepid recovery.