The UK economy in 2016: a flying start but watch the brakes

Cheap credit and petrol have got Britain motoring but the Bank of England must hit the controls at the right time

The UK ends 2015 as one of the fastest growing of the major developed economies. Unemployment is falling, the housing market is hot and consumers are happy to spend money in the shops or online. For at least the first half of 2016 it will be a case of more of the same. The reason is simple. The UK economy has plenty of momentum thanks to almost seven years of zero interest rates, rising living standards and government incentives to buy property. Even if there was a sudden nasty shock, it would take time for the effects to show up.

As it happens, recent developments have been positive for growth. The fact that motorists can find petrol for less than a pound a litre reflects the tumbling price of oil on the global commodity markets. That will cut business costs and raise corporate profits while at the same time cutting domestic heating bills and the cost of travel.