JUST in case you missed Anatole Kaletsky’s upbeat assessment of prospects for the economy, here are the best bits (link to the full article on the right):
“First, there is more and more evidence that the housing slump will do less damage to the British economy than is expected at present. Britain is in generally better shape to deal with a mortgage and housing crisis than any other important European economy.”
“While it is true that the OECD predicts that Britain’s GDP will decline in the third and fourth quarters this year, these declines are so tiny – just 0.1 per cent – as to be almost irrelevant, especially in a forecast where the margin of error is huge.
“All the other big European economies have suffered, in the second quarter of this year, GDP declines four or five times bigger than the ones predicted for Britain. The only reason why the German, French and Italian governments were not facing headlines about a ‘technical recession’ is that the OECD pencilled in growth projections microscopically above zero – 0.01 per cent for Germany – for the second half of this year.”
“Since the credit crunch started, the pound has fallen by 20 per cent against the euro and by 16 per cent on its trade-weighted index. This is already equal to sterling’s plunge after the ERM fiasco, which was followed by a powerful export boom. US experience strongly suggests that this devaluation, combined with the cautious mood of consumers, will soon trigger export growth in Britain as well.”
“The outlook should gradually improve from the start of next year. For the rest of Europe, by contrast, the economic troubles have only just started.”