Looking behind the weak data

ON UK INCOME

It is easy to be gloomy. In the UK, we are bombarded with a relentless litany of weakness - weak employment, weak earnings growth, weak bank lending, weak consumer spending, weakening sterling, weakening new orders for manufacturers, a weak and fractious coalition government.

In the eurozone, the recent agreement to fund the recapitalisation of Spain’s banks has not resolved the problem of excessive indebtedness among eurozone sovereigns and banks – it has simply shifted the distribution of risks and obligations.  Indeed, it might be argued that the agreement does little more than commit eurozone taxpayers to funding capital flight from Spain. Indebtedness, and the burden of repayment, will curb economic growth, inflame voter sentiment and unsettle European politics for years to come. And yet, in among all this gloom, take a look at China. Despite oft repe...