With a General Election looming within the next eight or nine weeks, it would be understandable if business activity had slowed down to the bare minimum necessary to maintain current levels and programmes. However, as this newswire shows, there are still  lot of new programmes commencing in the productive economy. So why, in apparently uncertain times, does there seem to be a surprising level of business confidence in the future. Perhaps it\'s because, in many respects, the future economic management of the country is out of the hands of politicians for the next five to ten years.

By that, I don\'t nmean that there won\'t be a Chancellor of the Exchequer in the next UK Government but that he or she won\'t really have much choice about the policy they follow. Sure, the main parties contesting the election will wish to suggest that their solution for eliminating the current gargantuan national debt is different from those of other parties but how can it be? The truth is that, with perhaps a few minor cosmetic variations, the next UK Governemtn must convince the markets that it not only has a plan to reduce and eliminate the debt but also will need to embark on that programme within this year as evidence that it means what it says.

And, the only real programme that any market will buy will be a significant reduction in the burden with which the non productive public sector of the economy afflicts the productive private sector. Tax rate increases will not only not convince markets of the Government\'s determination but they will actually both disincentivise enterprise and (contrary to intention) aggravate the problem by reducing the tax take as individuals and companies seek ways to minimise their UK tax liabilities.

So, in fact, the outlook for the UK economy is a lot more certain than might seem the case and it is this certainty imposed by the real world of markets that is enabling investors and businesses to plan far better than they might if the future depended on the fickle actions of politicians of any stripe. Like the one man facing backwards in the roller coaster with his fingers in his ears and singing \'la la la la la!\' the political class is ignoring the reality of a future that is clear to rest of us and in which no government can have much say at all.

Related Articles

Investments not inventory stripping  UK Banks offered GBP 37 billion rescue package  Credit Crunch Impact on South West Economy  Finance on Offer to Help Companies Increase Exports  A two edged sword