Economy gets a boost but there is little to shout about

The Prime Minister was in the mood to put out the bunting again as a result. At Prime Minister's Questions on Wednesday, David Cameron could hardly contain himself as he promised "good news" would soon be coming. Though Number Ten has since said the Prime Minister was speaking in general terms (disclosing market-sensitive information before publication being not the done thing and all that), there was a definite Tiggerish bounce to Mr Cameron. All that can spoil the feel-good mood now is for Boris Johnson, the London Mayor, to remind the PM the Olympics took place in his manor.

The Chancellor, George Osborne, was more cautious, issuing a reminder there was a long way to go. Though it is safer to skydive from space than it is to rely on what the Coalition Government says – remember the Budget debacle when you next recall the Alamo – in this instance Mr Osborne is worryingly correct. For the best clues as to where the economy is heading, and how long it will take us to get back to pre-2008 levels, forget the bunting and pizza index and think handbags and high-end drinks instead.

What is remarkable about the GDP figures, besides the fact they increased, was that they were a rare blast of sunshine in an otherwise bleak week. The Confederation of British Industry in Scotland reported a severe drop in new orders and output. That is storing up a lot of woe to come. Mulberry, the British manufacturer of handbags that cost as much as a foreign holiday, issued a major profits warning on Tuesday. After the company reported disappointing international sales in the first half of this year its share price fell accordingly. It is not the first luxury goods firm to feel a cold wind blasting in from Asia. Burberry has felt it too. As The Herald reports today, Pernod Ricard, makers of Chivas Regal and The Glenlivet, is seeing more moderate growth in Asia than previously, and in China whisky sales have fallen.

Since the global recession hit in 2008, Western firms have been increasingly reliant on the Asian market, China especially, for sales. In this globalised economy, we truly are all in it together. Whether it is Paisley or the posh end of Bond Street, jobs depend on parents in Shanghai or Bangkok buying Alexa bags as graduation presents for their daughters, or toasting their success with glasses of Chivas Regal.

Long may they continue, but the numbers suggest they will not be doing so to the extent shown previously. China remains the gold rush nation – wealth soaring, consumption increasing, GDP now $7.2 trillion. Growth is slowing, but the World Bank, reporting on East Asia and the Pacific region at the beginning of October, still expects growth to be 7.7% in 2012. Economically, there is no major cause for concern as far as China goes. Politically, the world's most populated country is another matter. In the Philippines, Indonesia, Thailand and Malaysia, growth was lower than projected.

In India growth is slowing. In Japan it has fallen from 1% to 0.3%. The East as a whole has been suffering blowback from the economic problems in the West: if the West can't buy from the East, the East can't buy from the West. In the West, the eurozone in particular, things are looking down, not up. One analysis has Germany going back into recession. In France the economy is tottering from bad to worse.

It is a gloomy and worrying picture. Yesterday's GDP figures in the UK, though going in the right direction, for which three cheers, could yet be revised downwards. Yes, it was a heartening rise, but given what happened in the previous quarter – rotten weather, that ludicrously long Diamond Jubilee holiday – the only way was up. In the critical construction sector, output was down. You don't have to be a pessimist to work in the British economy, but it helps. No wonder there has been an unofficial three-line whip among the Tories to ban any use of the phrase "green shoots".

Lord knows the British consumer could do with some positive news. Anything which sends people back into the shops is welcome. But consumers won't be fooled again. This, after all, is a recession started by those at the top which has hurt those at the bottom most. Households are now guided more by what the bank statement says at the end of the month than what the banking industry says. They read their own wage slips before they give credit to economic predictions. From main wage earner to student, they will never forget who let them down.

As a result, what we are witnessing in the West is the birth of a new, more savvy consumer. A little older, a lot wiser, and yes, more fearful too. With the ending of the old certainties – a job for life, a free education, a guaranteed pension – comes new concerns. Like what sort of society we will be a generation from now if the younger generation still can't find work; and how we will be able to fund getting older with fewer putting money in the pot. As for our growing economic reliance on the expanding East, the subsequent impact on the environment may have only begun to show itself.

Bleak times, then, a rise in GDP or not. Yet it is the new consumer's colder, harder, more realistic attitude that strangely enough gives cause for optimism. While politicians, most of them wealthy in their own right, have preached austerity, households have been actively engaging in it. Debt has been paid down and savings have gone up (unless you are a pensioner). Holidays have been cut back or have gone altogether. We are all Chancellors now. It has been miserable for many and truly punishing for the most vulnerable. And it is not over yet. On that point we can agree with the Chancellor. As for that Olympics bunting, it can stay in the loft for now.