The rhythmic crunch of metal upon metal can only just be heard above the blare of Radio One. The workers stand shoulder-to-shoulder as they once did in the Worksop mines.

Only now their hard hats have been replaced by hair nets; their overalls and heavy shoes by white coats and wellington boots.

Factories are springing up where pitheads once stood

This is the brand-new factory floor of Solway Foods, in Worksop, Nottinghamshire - where burly ex-miners make sushi and sandwiches for Tesco supermarkets.

A vast, shiny hangar built on land owned by British Coal, it employs nearly 200 people, most of whom lost their jobs in the wave of factory closures in the early 1980s.

With a turnover of �50 million, expansion plans are in the offing. Mark Orwin, a former miner, says it's been a lifeline to the community.

"I don't think they'll ever bring back the pits but we've got to move on and find other industries we can adapt to."

Keeping the wolf from the door

Companies like Solway Foods hold the key to how the UK has managed to avoid the recession that was widely predicted at the beginning of the year.

But though the success of these new firms has ensured that the economy is not actually shrinking, so far it has only managed to keep the wolf from the door.

Growth is still sluggish - output is rising at an annual rate of just under 0.5%, well below European competitors.

If one accepts the technical definition of recession as being two successive quarters of falling output, then we have, indeed, achieved a so-called "soft landing".

But this is hardly a surge in manufacturing and production, and though most of the signs are positive, they are also thin.

Cautiously optimistic

That means that, while there is optimism, it is tempered with caution.

Stewart Rickersy, President of Worksop's Chamber of Trade, is typical:

"Unemployment is certainly now starting to come down - not as fast as we would like of course, because we are still seeing job losses. But we are also now seeing job gains and the picture is more optimistic than it has been for quite a while."

Although jobs in manufacturing are still being cut, the level of employment in the economy as a whole is at a record high.

Consumer spending is bouncing back

Combine this with the lowest inflation the country has had for six years and the lowest interest rates in five years, and it is easy to see why consumer spending has bounced back after the gloom of last year.

So why the lack of confidence?

Luck not judgement

Perhaps one reason is that much of the country's good economic fortune has been down to luck, rather than judgement.

Inflation has been kept down by the high pound - which reduces the price of imports - and by cheap goods coming in from Asia.

This lack of inflationary pressure has enabled the Bank of England's Monetary Policy Committee to cut interest rates six times in the last eight months and remain close to the government's inflation target of 2.5%.

Last week the Bank of England predicted that wage and price rises could actually undershoot the target over the next two years.

But the bounce-back is so fragile that any shock to the system will be difficult to sustain.

And while the high pound has helped keep inflation down, it has had the adverse effect of hammering exporters - by making UK products more expensive abroad.

The pound has risen by up to 25% against its major trading partners since August 1996. The weakness of the Euro has meant that the recent interest rate cuts by the Bank of England have barely registered.

It looks as though salvation for exporters will only come through lower interest rates - which would weaken the pound by making Britain a less attractive place in which to invest.

But the Bank of England's hands are tied because other parts of the economy are doing quite well.

Not just that, but last Wednesday's average earnings figures showed wages rising at the dangerously fast rate of 4.8%. Another cut in interest rates could stoke inflation - and that is something the Bank of England cannot afford to allow.