Not a snappy title to a blog post is it! But those are some of the major things going on right now that have some effect on our economy in one way or another.

The latest chapter in the Eurozone crisis is again centred around Greece. With no stable Government and fresh elections in June set to be won by anti-austerity parties, a likely outcome is that Greece in one way or another will either default on its debts or be forced to leave the Euro. Both scenarios spell disaster for the country. But how much would this actually affect our economy? Personally I don’t think it would much. Our markets would probably take a big hit, but I don’t think there would be any great effect on the streets of Great Britain. Greece isn’t one of our biggest customers when it comes to exports and mainly relies on our tourism, which ironically would be boosted greatly if they had to resort back to a devalued Drachma. The biggest problem for our economy would be if a Greek exit would lead to further problems with Spain and Italy, the Eurozones 2nd and 3rd most faltering economies. Contagion really would then spell problems for us.

Our manufacturing sector has recovered and prospered somewhat recently, and one of our biggest customers is Europe, especially when it comes to cars. We need the Eurozone to get back to prosperity so that it has enough money to keep buying the things we are making.

Yesterday the IMF, probably the worlds most respected monetary body, said that the UK was doing the right thing by implementing this Government’s austerity plans. Something I don’t agree with to be honest but that is a different gripe. One of Christine Lagarde’s recommendations for the UK was to either start the quantitative easing programme again (something which the Bank Of England is unlikely to do now) or to cut interest rates! The interest rates one is a frightening one. Currently they are at a 300+ year old record low of 0.5%, she said that a cut to 0% would help boost growth. But I don’t see how. Yes people on a tracker mortgage will have less to pay, but everyone else who have savings or is a pensioner, this would be terrible news! I have only earned 10p interest in the last 4 months on my savings account, that is how bad things are when it comes to interest rates! So no, I don’t think an interest rate cut is the best idea!

Also today, it was revealed that April saw a sharp drop in retail sales of 2.3%. Not good news when people should be gearing up for a summer of spending. The weather might have had a slight part to play in it, but I think this still reflects a cagey public not really wanting to spend. The figures were mainly driven down by a whopping 13.2% drop in fuel sales. Now if this isn’t a message to the Government that the country is still being crippled by high fuel prices then I don’t know what is!

But good news! Inflation fell to 3% from 3.5% in April. You have to agree that is one hell of a decline for just one month. This will be welcome news to households who have found themselves being squeezed by fast rising living costs and wage freezes or cuts.

So, clearly a number of wide ranging and varying factors creating an economic tangled web for the country to try and work it’s way through. However I want to finish on a positive note. With the weather finally picking up, the Jubliee on it’s way with the Olympics and our industry performing better than we all expected it to, I don’t think it will be all bad this year. The window sector was forecast to do terribly this year but recently our manufacturers told us that we were 13% up on last year, and I think these comments are being echoed by many of us this year too!