The economic patient is stirring

If you glance at the breakdown for growth forecasts for the UK this year you will see what an economic system looks like as it starts to climb back out of recession.

If we achieve 1.5% GDP growth this year, it will have been driven mainly by public sector growth - likely to be around 1.7% - with a small contribution by private sector spending - around 0.7% - and some offsetting reductions in investment: investment spending has collapsed over the last two years and appears to be declining at a rate of 2.4% this year.   Oddly, while exports are expected to grow pretty well this year on the back of a more competitive exchange rate (forecasts suggest an expansion of some 4.5%), these are likely to be matched by higher imports so that there is only a very small net contribution to growth from trade.

The most recent estimated figures for UK GDP growth in Q1 make two issues clear.  Firstly, to use the

When governments and the market fails....

The  volcanic ash crisis is unfolding in a fascinating way with business leaders starting to look for someone to blame - and in this case it's 'the government' or even 'governments' of the EU that are to be blamed for not realising how bad the situation was becoming over the weekend.

I was one of those potentially stranded souls without a way to get home - from the Netherlands to the UK.  In the first case I had to change plans at the last minute on Thursday to ensure I could get to a business seminar in Maastricht.  Then as the situation escalated it was a matter of wondering how to get back.

The market system responded quite well to the occasion.  Eurostar found extra capacity it could lay on and its pricing model pushed ticket prices up.  Other alternative travel routes have followed suit.  The telecomms