At last we have some good news about the UK economy. In fact, to our way of thinking it really is good news.

According to the latest data from the Office of National Statistics, business investment during the 12 months to the end of Q2 was 4.2% up on the previous year, while the quarter on quarter growth was 1.5% up.

Originally the ONS said investment had grown a mere 0.5% in Q2 on the previous quarter, and at the time commentators bemoaned the only gradual improvement in UK investment.

Back in 2003, the UK missed a technical recession in investment by a whisker, with two quarters that year showing negative month on month growth.

The good Q2 performance came thanks to increases in capital spending from private sector manufacturing and construction industries and non-manufacturing public corporations.

Investment is a key factor behind productivity, and low productivity per unit of labour has haunted the UK economy, with the US, France and Germany producing far more per hour worked.

© Investment & Business News 2013