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Britain’s remarkable recovery from Covid

It’s worth noting that last year the UK saw a record £25.5bn in funding for venture capital tech startups, more than Germany and France combined. This brought the number of UK ‘unicorns’ to 75, mainly in areas such as artificial intelligence, digital technology, biotechnology and blockchain. People see what they want to see in Brexit, depending on their ideological bias. This infects the scan.

Italy hasn’t fared too badly thanks to Mario Draghi’s Bidenesque New Deal spending, but the Italian economy probably ended last year 1% below pre-Covid levels. Spain is still almost 5% lower. However, the rise in public debt in the Club Med bloc is staggering, and remember that these states are sub-sovereign borrowers with no currency or central bank of their own, i.e. they cannot unilaterally print their way out of trouble in extremis.

Overall, the eurozone is unlikely to recover its lost output until early 2022. “I think it’s fair to say that eurozone GDP was probably still just below its pre-pandemic level in the fourth quarter,” he said. Andrew Kenningham, director. Europe. economist at Capital Economics.

Caution is in order. The UK accelerated its recovery and favored the chart. Rishi Sunak’s ‘super deduction’ has reduced the effective marginal corporate tax rate to zero, prompting companies to invest their inflated savings, which reached £100bn during the pandemic, 50% down above normal levels.

The Bank of England has followed an extremely loose monetary policy with the lowest real rates in the rich world and possibly the lowest in peacetime. It’s rocket fuel for overheating. The current account deficit stands at 4% of GDP.

But again, a bad recovery is better than no recovery. As for the sequence of events, we recall Canto XIII of Dante’s Paradise:

“People shouldn’t be too trusting either.
Judging, since it is he who counts

Corn in the field before it matures.

‘Cause I’ve seen the hawthorn all winter
They first appear dry and barren,
And then produce its flower in the spring;

And I saw a straight and swift ship
runs over the sea in all its course,
It will finally perish at the mouth of the harbor.

Because one can go up and the other can go down.

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