The ONS has revised upwards its latest estimate of the UK economy’s growth rate in Q1. It now reckons the UK expanded by 0.2 per cent.

It’s odd. Economists are still lamenting the UK’s performance in Q1, and yet it is surely too soon to tell.

The ONS revised its assessment of growth in Q4 from 0.1 per cent in its first estimate to 0.2 per cent, then 0.3 and then 0.4 per cent. If the calculations for Q2 follow the same trajectory, the final estimate will say the economy expanded by half a per cent.

The main factor mitigating against growth was the rise in VAT. But the Q1 figures clearly showed that manufacturing was playing an important part in the UK’s recovery, which is surely what we need. The contribution of exports to growth in the quarter was zero. This is surprising given that the findings from CIPS/Markit have been pointing towards a very robust export-led recovery in manufacturing.

Meanwhile, across the pond, US consumer confidence rose to its highest level since March 2008. The latest score of 63.3 was more than double the reading seen in early 2009.

The rise in consumer confidence is occurring despite worrying news from the US housing market.

The latest Case-Shiller Composite Index, widely regarded as the most important indicator for gauging US house prices, has fallen for six months in succession. The US National Index for Q1 2010 was down 3.2 per cent on Q4 last year, which itself was down on Q3. With the US tax credit on property now at an end, it seems likely prices have much further to fall.

Alan Greenspan once said the US economy will not enjoy sustained growth until house prices recover.

The rise in consumer confidence at a time when house prices are falling is odd. It may be that US consumers have become so used to falling property prices that they learned to factor for this some time ago.

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