British Economy

The forecasts for the British economy are still far too optimistic. In my Bloomberg column today, I quote Lehman Brothers as saying there is a 35% chance of a recession. I think that is too low. A combination of a housing bubble, a currency bubble and an immigration bubble have kept the British economy going. People have factored in the end of the housing bubble. They haven't started thinking enough about what happens once the currency starts falling and the East Europeans start going home. That's when it will start to get painful.