Eddie George, Governor of the Bank of England and for some time now the man most influential in setting our interest rates in the UK, says the economy will slow down in 2001. He says that we have had it too good for too long. He says that the slowdown in the American economy will be deeper than would be desirable. Isn’t he a cheery chappie? The trouble is he may well be right, and the mere fact that he has said it will go a long way to making it happen.

As if Eddie George’s predictions weren’t bad enough, the telecommunications sector has just been hit by the threat of having to pay billions of pounds (or dollars) compensation for brain tumours allegedly caused by mobile phones. Although Vodafone dismissed suggestions of massive payouts, share prices in telecommunications companies tumbled.  The first legal action is about to start against Vodafone’s United States subsidiary Verizon. No matter that numerous studies by both those trying to prove a link exists between mobile phone use and cancer, and those trying to disprove any link, have equally failed to turn up any more than the most tenuous evidence to suggest a link exists. No matter that the general public worldwide are buying mobile phones in ever increasing numbers. No matter that governments in several countries have serious on-going studies to detect the remotest signs that there is any health risk at all from using mobile phones. The lawyers, in their wisdom, will proceed with action which, win or lose, will make them substantially richer while making mobile phone companies and their shareholders substantially poorer.

Yet all is far from doom and gloom. The UK economy is, at present, in remarkably good shape and remains the fourth largest economy in the world. Despite the bursting of the "Dot-Com" bubble earlier this year and the re-evaluation of so many companies’ shares by major shareholders, we in the UK are actually doing extremely well. As David Harbage, a respected economist with Barclays stockbrokers, commented: in the next year we can expect "subdued inflation", "a steadily rising market", "fixed interest rates", and in his view "the economy will be pretty boring" and "should remain firm". He is far from being alone in these views. He predicts that "the Market will bounce back from bad news in the US" and that the FTSE100 will rise rapidly to around the 7200 level. As he also points out, the collapse of the US economy has been predicted for some years – we are still waiting.

A very happy and prosperous New Year to everyone.