Green shoots 1

With new figures showing that the service sector grew much faster than anticipated in May, with the number of new businesses at its highest since February 2010, there are an increasing number of indications that the economy is finally recovering.

Sir Mervyn’s relief that he is bequeathing his successor as Governor, Mark Carney, an improving picture will be as nothing, however, to that experienced in the Treasury.

It was, of course, always George Osborne’s belief that an improving economy would kill off Labour’s challenge and carry the Conservatives through the 2015 General Election, even though there must have been many a time when the Chancellor feared that such a scenario would never happen.

Now, however, the immediate effect of this week’s good news is likely to be an end to Mr Osborne’s controversial policy of quantitative easing. Meanwhile, next month, the Chancellor will finally have the opportunity of working with his own man in the shape of former Bank of Canada governor Mr Carney.

But, while many remain surprised that Sir Mervyn – who worked alongside Gordon Brown in stoking the long boom that precipitated Britain’s terrible bust – has remained in his post for so long, it is another of Mr Brown’s acolytes who will be put under pressure by an improving economy.

For, so far, Labour’s economic policy has consisted of little more than a prediction that Mr Osborne’s programme of austerity would kill off any recovery at birth. And while no one should speak too soon, if the economy is truly on the mend, the onus will be on Shadow Chancellor Ed Balls to show the electorate what else, if anything, he has to offer.