Peter Bickley: Rewards at the end of our long, hard slog

IN RECENT years my visits to Edinburgh have involved serious stuff like wearing a suit and standing up in front of hapless audiences delivering merry homilies on the outlook for the world economy and markets.

The obligatory clamber up Arthur's Seat offered many a pause for reflection on the glories of a great city and the many mysteries of life. The trams, for example, have always baffled me. Why spend all those millions when the existing transport system is so good?

Actually, that mystery may be near a resolution. I hadn't realised Edinburgh was inventing something genuinely radical and new - trams that can run the length of Princes Street with no visible means of propulsion and somehow dispense with the need for rails on reaching West End. It just goes to show that I must take more time before rushing to judgment; there was I thinking it was all a municipal ego trip.

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That lesson, sadly, might also be applied to some of my recent observations on the UK economy. Economists are allowed to change their minds - it's one of the perks of the job - but I always take some pride in exercising that privilege very rarely.

Over the past year, however, I have been getting in a flummox over the likely course of the UK's recovery and since some of that inconsistency has been exhibited in this very column I suspect that the usual dodge - denying everything - won't wash.

My theme was pretty clear; the UK would indeed recover but it would be a long, hard slog, lacking much of the bonhomie usually associated with cyclical upturns.

Then I got obsessed by the deficit; a year ago I wrote here about the theoretical difficulties implicit in one economic agent (the government) cutting its deficit unless others (us, mainly) were prepared to spend more, an improbable eventuality. So then I reflected further on how things might be in 2011; it would certainly get off to a really bad start, but with corporate profitability strong and the "cuts" less draconian (in macroeconomic terms, anyway) as they looked the second half upside could surprise us.

No-one agrees and consensus forecasts have sagged into bleak territory. If I had just avoided all that thinking and stuck with my original view I could now feel smug about the consensus finally seeing it my way.

With that opportunity denied, what now? Being miserable is the new comfort zone - all those overpaid economists have nothing to gain from standing out from the crowd. That's why the consensus is usually wrong and why when it comes your way, it is time to think again.

I have paused, I have reflected and I stand by my amended view. Recovery will be a long, hard slog, it will be punctuated by setbacks and lost hope. It will also give us some nice surprises and with the prevailing view so resolutely grim we are due for one soon.

• Peter Bickley is a consultant economist