Growth. There is a fair level of pessimism about the outlook for the global economy as the recovery from the Financial Crisis in 2008 remains weak and central banks struggle to get inflation up to their targets. This was compounded by the rapid fall in the oil price at the beginning of the year. In actual fact, the oil price had been slipping ever since mid-2014 but the fall seemed to accelerate to reach a low of $26 in January. Such a low price called into question the economics of new oil producing regions such as the oil shale in the US driving many companies into bankruptcy. This in turn caused credit spreads to widen prompting fears of another credit crisis. As it happens, this has not materialised and the worst seems to be past. In fact there is some evidence of a recovery. This is most obvious in the United States. There the leading index produced by ECRI has turned up significantly since its low in early February. This index may be more co-incident than leading but is good enough for our purposes. Another index produced by Economy.com has also turned up in the same time period. Given that they are produced on a weekly basis, these indices will have a lot of noise associated with them. The OECD lead indicator which is produced on a monthly basis is not showing any sign of recovery and continues to decline, so the leading indicators are inconclusive. Another indicator worth watching certainly in the context of a credit crisis is the St Louis Fed financial stress index. This too deteriorated through 2015 in line with the falling oil price reaching a nadir in February. Since then it has improved markedly also in line with the oil price, suggesting the worst is past. This optimism does not sit well this week’s concerns over growth. Both the UK and the US have produced figures showing slow growth in the 1st quarter of the year and many analysts are arguing that matters will not improve in the 2nd quarter. In addition, we have Japan falling back into deflation and a surge in the yen. In this context one would expect government bond yields to be hitting new lows. This has not happened and in fact, bond yields have risen which is odd. The fall in the oil price was most definitely a shock. In the very short run, the costs to oil producers outweighed the benefits to consumers. The result was a panic. But economics says in the long run the implicit rise in real incomes from a falling oil price will work through to consumer sentiment and produce a rise in spending. I would suggest we are now beginning to see this happening.