Every time that GDP figures are released there are many dramatic headlines about the effect this has on growth forecasts. This is usually accompanied with statements on how weak the UK economy is, usually put in terms that sound like a recession is imminent. The truth is, of course, that a recession is not part of even the most pessimistic forecasts. Even those like Roger Bootle at Capital Economics who have been predicting house price crashes and consumer spending slow downs haven't come up with growth below 1.5%. Given the state of the world economy and the UK long term historic growth rate of 2.0% that doesn't sound too bad.

What we are really talking about here is a balanced judgement about the future. There is, in fact general agreement on the overall robustness of economic growth. Any consumer spending or housing adjustments are seen as temporary (and necessary) features in an otherwise strong long term view. If there is general agreement on this long term view then it follows that public sector borrowing should also not be of too great a concern, as this too should only be considered as a long term issue over the course of this and the following growth cycle.