The country and the halls of power in Westminster eagerly await today's figures to find out if the combined policies of both government and the Bank Of England have prevailed and dragged us out of the sharpest recession in living memory.
Has Gross Domestic Product increased for the first time since April 2008? Or has the slide in GDP been curtailed enough to show improvement but not recovery? The spotlight is firmly fixed on both questions. The services sector has seen an increase but then again what else was anyone expecting given two major factors that have kept this whole sector afloat.
Firstly the stimulus by the Bank Of England, namely quantitative easing,Â has prevented the banking industry from collapse and even allowed a measure of risk toÂ creep back into the banking system. After all, those reintroduced bonuses are not rewards for winning the 'Jacob Marley School Of Tight Lending'Â prize for 'scrupulous and sensible risk free lending'. The knock on effect of renewed confidence in the Square Mile is that the City supporting services all do very well. If this were a true reflection for recovery then you could gauge the recovery by theÂ levels of cocaine supply and high class escortsÂ circulating Canary Wharf.
Secondly the weak pound has meant that there has been a certain renaissance in the British holiday industry through foreign tourists taking advantage of the weak pound and more Brits deciding to holiday at home due to the increased cost of holidaying abroad. All thanks to our devalued currency.
So all in all the services sectors are having a very nice time thank you very much and to be honest having Â£175bn worth of liquidityÂ re-injected into the the Banking industry might have had something to do with it.
This may come to a huge shock to those who live and work in London. There is actually an entire country attached to the capital of Great Britain and it is not doing nearly so well!
Unemployment is still rising with little in the way of convincing figures to suggest otherwise. So when the city of London is cheering and raising a glass of champagne whilst snorting a line of coke off a call girl's backsideÂ the rest of the country is left wondering and asking one question…where is the recovery? The deputy governor of the Bank Of England Paul Tucker has described any recovery as being "anaemic"….I would say academic is a more appropriate description considering the recovery isÂ predominately regionalisedÂ and localisedÂ in the industries it effects whilst industrial production has seen some sharp drops in recent months.
Therefore we are looking at an appearance of growth which is about as convincing as Nick Griffin saying he is not a racist. The services sector took the largest knock which gave us our aggressive falls in GDP until quantitative easing can along and stuck a few armbands on the sector. This was because the specific industry failing within the services sector was the banking industry and that industry is held up by liquidity which is about to run out. The only other option is to continue the process of quantitative easing for the next couple of years. But this would have undesired consequences likeÂ destroying the pound and bond market.
Who would want to buy government debt?