The sad US housing story is bad for our wood exports, the UK fiscal retrenchment is hurting our UK tourist numbers and the fragile Japanese recovery restrains our food exports. 4  BIS Review 155/2010  Our own internal rebalancing is progressing, but very slowly. Substantial fiscal stimulus helped cushion the economy over the past few years.
The fiscal deficit will need to be closed and private demand take over public sector support. Moreover, it appears that some of the fiscal deficit is structural and unwinding this support will subtract from growth for a number of years, with our housing market remaining weak, consumption impaired, balance sheets fragile and businesses remaining cautious. Private demand is still impaired.