Osborne visits China, but can't escape Europe

Yet another day here in Westminster that’s all about the economy. Nick Clegg has just delivered a speech on the subject to Mansion House, focusing on ‘responsible capitalism’, which we’ll blog shortly. And two prominent forecasting groups, the Ernst & Young ITEM Club and the Centre for Economic and Business Research, have suggested that we’re effectively back in recession. They both reckon that the economy shrank in the final quarter of last year, and is wilting even further in this current quarter. But, like the OECD, they also predict that this ‘double dip’ will be relatively short-lived and relatively mild.

Against that backdrop, enter George Osborne. The Chancellor spoke from the Far East on the Today Programme earlier, and delivered seven minutes of near-unalloyed reassurance. Yes, he admitted, we’ll take a hit if the eurozone sinks, but he was quick to add that, ‘I’m confident the British Government is doing everything it can with a very difficult inheritance, facing a very difficult international situation to get Britain through this, to weather the storm.’