A return to economic growth, better-than-expected inflation data and some breathing room in bond markets. Rachel Reeves is finally seeing some positives after a rough start to the year.

However, for the chancellor, she knows talking about some green shoots of economic recovery would be a dangerous game. The broad picture for the economy is that it remained steady in November after two consecutive months of modest declines in output.

It's no surprise that Reeves said she was "determined to go further and faster to drive economic growth." November's 0.1% gain is unlikely to be enough to avoid a stagnation in the fourth quarter. It sets the stage for a full half-year without any progress on Labour's top priorities, following a similar performance in the third quarter. Coupled with inflation continuing to be higher than the Bank of England's 2% target, a period of "stagflation" is coming.

The turnaround has become even more important as the chancellor faces pressure following market turmoil.

Even as cooling inflation data on Wednesday gave Reeves some breathing space, helping to lower Britain's borrowing costs on financial markets, the broader growth of the past few months still puts her in danger of breaching the fiscal rules she has set.

In response, the chancellor has considered further cuts to public spending, while investors have warned that tax increases may be needed to balance the books. But stronger economic growth could help boost tax revenue for the Treasury.

However, reversing the economic stagnation is unlikely to happen anytime soon. The government is prioritizing investment in infrastructure and productivity-enhancing projects, and planning reforms to kick-start a housing revolution. However, while economists generally agree that this is the right thing to do, they also warn that it could take years to bear fruit.

Labour’s options for promoting growth are constrained by the need to ensure fiscal responsibility. Business leaders have warned that a £25bn increase in employers' national insurance contributions announced in the budget will cost valuable management time that could be used to prioritize growth while undermining their ability to invest.

Still, there are some positives. Inflation has fallen from a peak of more than 11% in the second half of 2022, bringing about a pickup in real wages, with income growth remaining resilient, allowing households to start repairing their financial situation.

Household savings rates, a measure of disposable income, remain above pre-pandemic levels. Analysts said a return to confidence this year could help boost spending after pessimistic rhetoric unnerved consumers ahead of the autumn budget, which continued to weigh on activity in November's GDP data.

The Bank of England may also cut interest rates more than financial markets expect. Threadneedle Street's latest policymaker, Alan Taylor, believes interest rates may need to be cut to 3.25% from the current 4.75%. If that happens, it would be a mixed blessing, as it would partly reflect economic weakness. But lower borrowing costs will help businesses and household consumption.

The chancellor is desperate to turn things around after a difficult start to the year.