I could start off this month's contribution by going over the latest UK economic data, but that would be somewhat depressing as industrial output fell once more, with manufacturing production in January a full 3% down on the same month in 2012.
That cannot all be weather-related. Despite sterling depreciation a surge in manufacturing and manufactured exports is not on its way to save the British economy from the mire in which it is embedded.
Alternatively, I could look to the eurozone; but commenting on the Cyprus story and its implications would again be depressing, as would looking at Europe's "real" economy and noting that Q1 could be another negative quarter for the eurozone as a whole.
The problem is that, aside perhaps from the USA for the time being at least, there are few if any bright sides upon which our gaze can be directed. In my contribution to the post-Budget debate organised by the Sunday Herald I commented that the Chancellor was "caught in a trap" – a vicious circle indeed.
Slower-than-expected growth is making the public finances worse and worse; and in turn disappointment on the public finances front (slower-than-expected progress in turning the tide of rising debt) makes it increasingly difficult to contemplate any moves to boost confidence and demand and hence move towards a modicum of higher growth.
Indeed, even when he is not making any such moves but rather introducing a neutral Budget, the Chancellor is being forced to accept unwelcome delay in both the time when annual deficits will start to reduce and the expected date when UK debt levels will peak. He is quietly missing one of his fiscal targets and now expects debt to peak at more than 85% of gross domestic product as late as 2016/17.
Without being a prophet of doom, it is perfectly conceivable the latest economic forecasts from the Office for Budget Responsibility (OBR) will prove to remain over-optimistic, and hence the outlook for the public finances even more distressing.
The OBR is at an appropriate arms-length from the UK Government in its operation and can be treated as wholly independent. Its chairman (Robert Chote who visits Edinburgh later this month for Holyrood evidence-giving and a DHI seminar) and his staff are highly skilled in their chosen profession of economic forecasting.
But sadly that does not necessarily mean their forecasts will prove accurate. Economic forecasting is truly a mug's game; relationships between features and trends within the UK and international economies are immensely complex and non-stable; and there are an increasing host of unpredictable matters to try to take into account.
Since the 2008 crash, forecasts have proved consistently to be on the optimistic side. I expect that to continue to be the case with this latest set. So we could have a triple-dip recession. We could find growth below the OBR estimates of 0.6% this year and 1.8% next. Even if these modest levels are achieved public sector borrowing will remain flat into 2015. The March 20 Budget will improve neither UK growth prospects for the next few years nor the outlook for the public finances.
It is essential to keep on reminding ourselves this recovery is like no other we have known – or even that our parents and grandparents experienced.
We are not returning to the joyful days of strong and stable growth experienced around the turn of the last century.
We have entered a whole new phase in the modern economy.
The future is intrinsically uncertain, but we have to accept an extended period of modest – at best – growth. We must also accept that, even when we are genuinely beyond the recessionary period, the outlook will be very different indeed from the past. We must expect and allow for the unexpected.
Whatever may happen in the September 2014 referendum, Scotland too faces many years of slow growth, tight public finances and generally tough times.
A sharp easing of fiscal policy is not going to happen and would not be the answer. The Chancellor is looking for more activism from the new Governor of the Bank of England, and has accordingly changed the Bank's remit a touch so that it can look equally at promoting growth and limiting inflation rather than focusing almost exclusively on the latter.
Even setting aside the rising risk of higher inflation ahead, I am not aware of any "untraditional" measures the new Governor could introduce that would have any marked impact upon the outlook. We must accept we face several years of slow growth and an extended period of tough decisions on budgets in households, firms and Governments alike.
So what can we do? In this new era for our economy it appears inevitable the nations which pull out first and manage recovery best will once more be those which make the most of their scarce and valued resources.
This means working to maximise our skilled manpower and encouraging quality investment and enhanced productivity. Micro policies will matter more than macro ones for some years to come.
Jeremy Peat is director of The David Hume Institute
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