The British economy has taken quite a battering recently, both verbally and literally. When this crisis hit the United Kingdom was in a particularly bad position.
This was for three main reasons. Firstly, the UK was over-exposed in the financial sector, with the City of London playing a key role in its economy as a result of the slacker regulation brought in by Margaret Thatcher and carried on by Tony Blair.
Secondly, the British pound was overvalued against the euro and the dollar, which is bad news for exporters at a time of rapidly diminishing world trade.
Thirdly, Gordon Brown's years of heavy borrowing as the Chancellor of the Exchequer and the resulting deficits that had been racked up did not make happy reading as the crisis hit and large numbers looked to the government for a bail out.
Yet the first two of these problems appear to have been at least partly resolved, as a result of government action and the laws of economics. The financial sector has been supported aggressively by Brown, who effectively took the lead in calling for massive government fiscal stimuli to combat the drastic decrease in private sector credit. This has largely worked, and some British banks, notably Barclays, have even managed to avoid government help altogether.
And the pound's value has dropped dramatically against the dollar and the euro, giving a timely boost to Britain's relatively small yet nevertheless significant export industry.
The question of the third point is still in the balance, and the British public are almost certain to have to tighten their belts in the next few years as taxes are raised and public spending cut to service Britain's debts. Yet rapid economic recovery, which would significantly alleviate the burden on the tax payer of this, appears to be closer than most commentators have allowed for.
As Paul Krugman wrote yesterday, the British economy is recovering more quickly than any of its significant European competitors (Germany, France, Italy and Spain) and may even have started growing again already (Krugman: A British Bounce?).
Should this turn out to be true though it will no doubt benefit the Conservative Party who are poised to take power at the next general election which could happen any time given the swell of discontent from within the Labour Party and the British public as a whole. Labour's disastrous showing at the recent European elections, and Brown's immense unpopularity mean that it will be the Tories who will mostly likely rule Britain for the next decade.
George Osbourn, the Shadow Chancellor, admitted recently that the Conservatives could become very unpopular very quickly if forced to raise taxes and cut public spending shortly after coming into office. Yet at this rate they will enjoy a significant bounce as the British economy grows again on their watch.
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