THE Footsie surged back through the 5,900 barrier last night after a report from an influential think tank raised hopes that the global recovery had reached a positive turning point.
Economic optimism in Japan and the United States has driven a tentative improvement in the international outlook, according to the Organisation for Economic Co-operation & Development (OECD).
The Paris-based group said that its “composite leading indicator” (CLI) – which is designed to flag up turning points in the outlook for the world economy – rose by 0.2 points in December to 100.4, above its long-term average of 100 points.
India and Russia showed evidence of improvement, the OECD said, but there were still mixed messages from the eurozone.
The CLI reading for the UK, which has been falling since February 2011, dipped by just 0.1 points in December, boosting hopes Britain may avoid a double-dip recession.
The up-beat news came as the CBI predicted that the UK would avoid a return to recession, although it trimmed its economic growth forecast for 2012 to just 0.9 per cent from 1.2 per cent and lowered its 2013 prediction to 2 per cent from 2.2 per cent.
But Howard Archer, chief UK and European economist at IHG Global Insight, warned: “Despite overall recent signs of improvement, we suspect the UK economy is not yet out of the woods and expect activity to be limited in the first half of 2012.”