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It's nice to see that someone else recognises that the Brown economic miracle has been nothing of the kind.
In fact, Britain's growth over the past 15 years has been "more mirage than miracle", according to a new report from think tank Policy Exchange.
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German economists Holger Schmieding and Oliver Hartwich say that they came to Britain "believing it was a free-market haven."
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You can almost feel the disappointment and vague sense of betrayal come off the page when they realised the grim reality
The German authors of a new report into Britain's economic miracle' described themselves as "disturbed" by the state of the British economy. "This is the year when the state sector in the UK as a share of GDP rises above the level in Germany. It's shocking."
They point out that even as the rest of Europe is trying to cut taxes, the UK is "relapsing into high tax and high-regulation sclerosis," says Ambrose Evans-Pritchard in The Telegraph. This backwards slide has only been masked by the housing boom, which has in turn fuelled a debt binge, leaving UK consumers with no savings (compared to an 8.3% savings rate in 1992), and personal debt of £1,343bn, which is higher than annual GDP for the first time ever.
This has left us in no position to weather the coming storms. "The UK is now in worse fiscal shape than almost any other major Western country."
That's not exactly comforting at a time when house price growth - the major driver of our economy for several years now - is slowing. Monetary Policy Committee member Kate Barker has just warned that buy-to-let could be a potential trigger for prices to fall. "A source of weakness could be the buy-to-let market, given a combination of higher interest rates, little change in rents, and reduced expectations of price appreciation." The sector accounted for 12% of mortgage lending in the first half of this year.
Martin Waller in his City Diary column in The Times reckons the property market must be on the turn, because stories about people paying stupidly high prices for "daft or inconvenient" properties have dried up. "We haven't seen many broom closets in Chelsea going for six-figure sums of late. Now I hear that a beach hut at posh Southwold, Suffolk, is up for sale with a guide price of £26,000." Seems a lot, but "my spy insists that one such hut went for £42,000 a few years ago."
Meanwhile, the other major driver of growth - the money shuffling in the City - is still under pressure from the continuing fall-out from the US housing market collapse. As Damian Reece puts it in The Telegraph: "If our first city sees a slow-down, will our second city be in a position to pick up the baton? Not if it's Birmingham, where unemployment is 7.4% and 20% of the working population have no qualifications."
As Reece points out, our "vast public sector" is "only just countered by a private sector over-reliant on financial markets that look ready to go overboard any moment."
It looks like it won't be long before that comforting mirage of strong growth and prudent management that we've all been told to believe in, shimmers and vanishes from view.
For more on why buy-to-let is the biggest threat to the housing market and by extension the UK economy you should read our most recent RoundTable report on the subject: Are we heading for a house price crash?
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Turning to the wider markets
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In London, miners and housebuilders led the FTSE 100 up 54 points to a close of 6,514. However, the index ended the day well off its intra-day high of 6,562 due to a downturn on Wall Street. For a full market report, see: London market close
On the Continent, the Paris CAC-40 also fell back from earlier highs to close with modest gains of 43 points, at 5,705. And in Frankfurt, the DAX-30 was up 47 points at 7,842.
Across the Atlantic, stocks rebounded from an earlier slump to close higher, thanks to strength in the tech sector. The Dow Jones added 109 points to close at 13,676. The S&P 500 was up 13 points at 1,519. And the tech-rich Nasdaq added 45 points to end the day at 2,799 as investors piled into Apple and Amazon.
In Asia, stocks had slipped into the red near the end of the session. The Japanese Nikkei was down 92 points at 16,358 on profit-taking. And the Hang Seng was 43 points lower, at 29,333, at time of writing.
Crude oil futures continued to slide this morning, last trading at $85.25 in New York. And in London, Brent spot was down to $82.58.
Spot gold jumped $6 to $759.20 in New York late yesterday on dollar weakness but had slipped to $757.00 in Asia trade. Silver had fallen to $13.50. And platinum had fallen around $10 to $1,435 overnight on investor concerns that last week's concerns over supply shortages had been overdone.
In the currency markets, the pound had strengthened to 2.0473 against the dollar and 1.4393 against the euro this morning. The dollar meanwhile, was at 114.43 against the Japanese yen and 0.7030 against the euro.
And in London this morning, life insurer Resolution announced plans to return approximately £2bn to shareholders following its acquisition of Friends Provident. The move appears to have been made in response to mooted takeover bids by fellow life insurance stocks Pearl and Standard Life which threaten to break up the Resolution-Friends Provident merger. Shares in Resolution had fallen by as much as 1.3% in early trade.
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