Erikka Askeland: We could all be left feeling flat, a bit like the UK's economy

DO YOU feel better now? As the bunting and camping gear is cleared from the Mall in London and the papers have been scanned for pictures of the silliest hats, it will be back to real life next week after one more bank holiday.

In Scotland and Canada, people are going to the polls to determine the flavour of their next government, while the monetary policy committee convenes again in Threadneedle Street to decide if it will add to the squeeze on households by notching up interest rates. But despite the fillip to the economy provided by Kate and Will's big day - at least for the makers of bunting and commemorative china - the MPC is probably going to hold off again because GDP is flat as the brim of the Queen's yellow hat.

This will prove a disappointment for Andrew Sentance, who will depart the MPC after the next meeting without anyone having listened to his hawkish warnings about the need to quell inflation, which could continue its meteoric rise to 5 per cent. This is because a tank of petrol now costs about 100 and other commodities are still rising.

This week, Howard Schultz, the billionaire founder of Starbucks, complained how speculators were behind the fact coffee prices hit a 34-year high of $3 to the pound on Thursday. Then the soon-to-retire Robert Schofield, chief executive of Premier Foods, picked up the same theme complaining how rampant speculation was driving up the price of Branston pickle and Bisto.

Despite these inflationary factors, the MPC doves have at least two tricks up their sleeves that will allow them to win the day and kick a small interest rate rise into the last quarter of the year. But perhaps "win" is too strong a word, because the same factors that allow people to continue enjoying low mortgage payments are the same that mean the UK economy will remain in the doldrums.

One is UK consumer confidence, which, yesterday's street parties aside, is set to perpetual gloom. A recent Ipsos Mori poll found that Britons are among the most negative about the economy in the world. Last month, the despond reached a 26-month nadir. This means that consumer demand won't be pushing up the price of anything anytime soon, as shoppers avoid the high street and continue to put off decisions to buy property and holidays and the like.

The other, unless you are a banker in receipt of a nice bonus or a newly enfranchised duchess, is that there is little to no prospect of wage inflation. Cuts and their resulting higher unemployment mean that the jobs market will remain "soft", in the sometimes playful language of economists. The same gloomy belt tighteners aren't haranguing their bosses for a pay rise because they figure they have as much chance of one as Pippa Middleton does marrying Prince Harry.

But next week, some economic indicators are set to show some good news coming on the horizon. British manufacturers are flogging their wares abroad, while Easter and a little wedding hat shopping will have given a boost to the increasingly desperate retail sector. By the end of 2012, it is expected that the lump in commodities will have deflated and real household income will look and feel bigger by comparison. Although it is hard to expect the happiness engendered by events like a royal wedding will last until then.

Stephenson's aiming to link Lloyds to young people's hopes

CAN Lloyds Banking Group use its still considerable sponsorship clout to remedy the tarnished reputation of the banks?

If Lisa Stephenson, head of sponsorship and Olympic marketing for Lloyds in Scotland, has her way, it will. Stephenson emerged this week from behind the dark cloud that has settled on the bank since its takeover of HBoS to talk to a select group of marketeers in Edinburgh about the bank's post-crisis sponsorship strategy.

Much of this is currently focused on the upcoming London Olympics. One of the aspects of Stephenson's job is making sure some of the bank's 80 million tier-one sponsorship of the 2012 games gets to Scotland.

Recently the bank upped the number of Scots athletes it supports through its "Local Heroes" programme from 32 to 82. But she must also manage the confusing job of running the Lloyds TSB National School Sport Week which will be sold along with the TSB branches in Scotland, alongside the Bank of Scotland sponsorships. Much of the bank's emphasis and sponsorship might is now on supporting talented young people. A canny move, as it will be the younger generation who benefit from the bank's support that are less likely to associate Lloyds with the ignominies of the banking crisis.