1. Chief U.S. Economist, High Frequency Economics Ian C. Shepherdson This is Going to Hurt Brace!

2. 1. The U.K. Economy, Short Version

3. 2. The Great Contraction is Over…

4. 3. …But the Legacy Remains in Unemployment…

5. 4. …In Shrinking Bank Lending

6. 5. …Especially for Construction…

7. 6. …With Predictable Consequences for Housing Starts…

8. 7. …So Waiting Lists Will Remain Huge

9. 8. The Budget Deficit has Exploded

10. 9. As Recession Hit, Revenues Plunged; Spending Jumped

11. 10. But the Prior Surge in Spending Made Us Vulnerable

12. 11. The Public Debt Ratio Cannot Rise Forever

13. 12. Where to Find 5% of GDP, or £70B Per Year

14. 13. What About Taxes?

15. 14. Summary The economy is still very sluggish as the Great Deleveraging continues Severe public sector retrenchment is inevitable; the issues are the extent, timing and incidence of the pain Interest rates will remain very low for the foreseeable future; there is no inflation threat Britain’s chronic housing shortage cannot be fixed under these circumstances