UK economy: Our demons are not deflationary but systemic

Henry Hopwood-Phillips 11.17am

We live in a time in which political correctness handicaps political honesty and a lack of capitalist courage hobbles market transparency. Churchill famously remarked, “when the eagles are still, the parrots begin to jabber”. And Orwell warned us that “to see what is in front of one’s nose needs a constant struggle”.

We are stuck in an economic quagmire because fractional reserve lending, in layman’s terms “unbacked credit”, has created a system funding activities (mostly non-productive) that a free market would never support. Activities that consume and do not produce any real wealth.

This in turn creates an atmosphere in which checks and balances in the capitalist system, e.g. Glass-Steagal Act (repealed 1999), start to seem anachronistic. Attitudes of important offices, e.g. mortgage underwriters, become lax. And collateral values are allowed to decline, as easy credit distorts the market.

In 2007-8, this credit bubble started to rupture. The trigger was US sub-prime mortgage lending but no doubt the day of judgment would have come sooner had the ‘masters of the unvierse’ not chopped and mixed good and bad debts into unfathomable CDSs, CDOs, MBSs and other jargon-heavy “investment vehicles”. Banking talents seemed to lie in obfuscation rather than financial genius. Banking solvency suddenly became an issue as banks were revealed to be over-leveraged and over-exposed.

The solution in the US was the TARP, which hoovered up illiquid “troubled assets” in return for spreadsheet honesty, the conservatorship of Fannie Mae and Freddie Mac, the bailing out of AIG, and Dodd-Frank regulation to ensure mistakes were not repeated.

In contrast, the UK (and Europe to a lesser extent) nationalised bad banks and kept credit spreads fairly opaque, fearing that to allow any of its interconnected clique of megabanks to fail would precipitate a domino effect. Private debt effectively became public debt overnight. Privatised profits and socialised losses united socialists and capitalists in anger against a managerialised system.

As banks all deleveraged at once, a credit crunch ensued. Servicing nationalised debts on already fragile fiscal bases became untenable in the politically undecided and therefore economically rootless eurozone. As market confusion spread over where the buck effectively stopped within EU institutions, debt prices for PIIGS began to rocket and further “stop-gap” bailouts were required.

A fall in money stock, caused by a credit crunch, is usually followed by a fall in prices, i.e. deflation, as stable services and goods chase less money. However, central banks, as Milton Friedman famously said, “are always looking to correct their last mistakes”. Deflation is the spectre that haunts the mistakes made by central banks during the Great Depression. And so the central banks print money. They print money for government bailouts, print money to get banks loaning, print money to increase general liquidity.

The problem with all this is that loose monetary policy caused the mess in the first place. And it is now prompting moral hazard by acting as its own solution. It insincerely pretends to fight off the deflation that would raise the debt burden because in fact central banks don’t want you use their quantitative easing (QE) to pay off debt because that would decrease the money supply (causing deflation); in fact, they want you to increase your debt in order to buy irresponsibly and continue the consumption bubble that would continue the prosperity illusion.

Side effects of deflation, such as a fall in economic activity, might be painful but all the pain is, in reality, the burning away of the inflation that no longer reflected the actual wealth produced. Shattering illusions of prosperity caused by money pumping. Would you rather live in a castle on a cloud or a house on the ground?

The debate on what principles our monetary system should be based upon, whether it be fiduciary, commodity-based or various hybrids, is for another place at another time but what must be clear is that fiat money and fractional reserve banking do not impose a natural limit on the growth of money supply. The current system has failed us and yet no real debate on the essentials seems to be occurring.

Follow Henry on Twitter @TheHolySmoke

Despite slowdowns, economic stalemate between Europe and China is set to continue

Henry Hopwood-Phillips 3.44pm

Economic data from China is mixed. The bad news is that after first-quarter GDP growth of 8.1 per cent, second-quarter growth is being revised downwards from 9.5 per cent to 7.8 per cent by Caixin, one of China’s leading financial publications.

Reuters reckons second-quarter growth will fall even further, by 7.6 per cent, the weakest rise since 2008. Other indicators fare no better. Industrial production has risen by the lowest amount in three years, at 9.6 per cent. Electricity consumption fell to 3.7 per cent from 7 per cent in March. Property prices fell in over half of China’s seventy leading cities. And manufacturing PMI suffered its eighth consecutive month of contraction, from 48.8 in  June to 41.8 in May.

The second set of statistics paints a rather different picture. Exports were expected to clock a 6.8 per cent rise but instead surged by 15.3 per cent to $181.1 billion, mostly due to American demand. Not only that, imports only increased 12.7 per cent, giving a healthy trade surplus of around $18.7 billion. One of those imports was oil, which was bought at a record rate of six billion barrels a day in May due mainly to its low price and unstable future.

Bears point to a real estate bubble, over-capacity, over-investment, and a consequent lack of inflation as signs of over-extension. Bulls tend to side more with Jim O’Neill of Goldman Sachs who notes that the historical weight placed on production stats is misplaced and that “indicators of consumption are becoming more important”; and Jack Perkowski of Forbes who reckons “the phrase ‘property bubble’ will no longer be in the vocabulary” reasoning that it must have bottomed out after nine-months of decline.

The Chinese government, noticing a slow-down in demand, has not been slow in reacting. It has cut its interest rates for a second time. Consequently the yuan weakened against the US dollar in Shanghai.

Further measures are also being taken. The monetary authority is pumping 225 billion yuan into the financial system by conducting reverse-repurchase operations. The last steps to lower the amount of cash banks need in reserve, started in November and freeing up 1.2 trillion yuan for lending, are being implemented. And investment projects, many in the underdeveloped interior and western parts of the country, are being fast-tracked.

Beijing also hopes to boost energy demand by subsidising energy-saving white goods to the tune of 26.5 billion yuan. Such measures make a mockery of bullish claims that the Chinese government would intentionally try to cool the economy down in order to tactically restructure it.

China knows the oil that lubricated the post-war global economy is running dry. As the purchasing power of the Western consumer, based at first on rising wages but later on rising house prices has evapourated, no significant replacement has compensated for that lost demand. According to Bloomberg’s David Roseberg over 80 per cent of the world’s top economies are now posting a contraction in industrial activity. The EU and US together account for approximately 40 per cent of Chinese total exports but China knows that its long-term future lies with its own domestic consumer. This is why it has not been afraid to upset the laissez-faire apple cart by playing dirty with its currency, by using state funds to stockpile underpriced rare earths whilst imposing quotas and caps that ensure they remain in its domestic market, by refusing to “save” the eurozone, and by imposing duties worth £2.1 billion on US-made cars.

But the long term is naturally a long way off. Though there is talk in some quarters that the West needs to restructure its economy from a consumer-driven to an export-based one and that China needs to do exactly the opposite, the fact remains that the Chinese, with no real welfare state to speak of, are driven by both economic necessity and to a lesser extent culture, to save and supply rather than consume and demand. The West also has a tendency to overlook the old cronyist fundamentals of the Chinese economy which ensure the masses have little option but to stash their cash.

The fact is that much of the economy is still run on political rather than economical capital and that many bad debts are still sloshing round the system. Current generations are also living with the repercussions of the one-child policy legacy left to them by Xiaoping in 1979. They must save because demographically fewer and fewer people must support an ageing 1950s baby-boom generation.

In the short to medium-term the Chinese middle classes are not going to be either big enough or rich enough to fill the demand gap left by western homo consumericus and that gap remains unfilled by both BRIC and MIKT countries. This is the biggest single factor in the Chinese growth slow-down from averaging 10-13 per cent in the past decade to more humble 8-9 per cent IMF predictions this year.

But the Chinese have so far refused to invest in European customers who live in a eurozone that, according to Jin Liqun, Chairman of CIC, they believe to be profligate, lazy and politically undecided. China wants a eurozone to rise in its own image, with a freer market at ground level and a more centralised political command.

However, both seem unlikely to materialise and so, ceteris paribus, until one side blinks the economic stalemate looks set to continue.

Follow Henry on Twitter @TheHolySmoke

The financial and Eurozone crises have changed the face of politics forever

Sara Benwell 6.45am

Economic policy has always been important in politics, and people have always cared about fiscal policies that affect them directly, but not such a long time ago broader economic strategy only made up a small percentage of the issues that mattered when people decided who to vote for.

Essentially, voters cared if their taxes were going up, but when it came to broader economic strategy the issues were sidelined compared to other policies that had more obvious effects on people’s lives. Moreover, much of the banking world and financial terminology remained a complete mystery to the majority of the electorate, so as long as things were going well, economic policy was seen to be less important. Everyone presumed that the government and the bankers knew what they were doing.

Then came recession and the onset of the Eurozone crisis - and everything changed.

Now more people have a better working understanding of finance. Almost everybody I meet has an opinion about Greece, about Spain, about whether the Eurozone will break up and most importantly about whether or not the Government is doing the right thing to deal with the financial crisis or whether now is the right time for a credible plan B, or even C.

People don’t merely care about the areas of policy that effect them; they now care about the broader economic strategy. The space allocated to business and financial news - not just in the broadsheets but also in the tabloids - is increasing and is reflective of a growing public interest. These days it’s rare you’ll see any business stories in the national press that don’t have a direct link to finance and the economic situation; more often the stories will reflect job creation or losses, financial results, or economic indicators.

While the economic crisis is clearly not a good thing, it’s arguable that the increase in public knowledge and awareness has to be the silver lining to the debt crisis cloud. How many people fifteen years ago knew about monetary policy decisions, about inflation and about quantitative easing, let alone had a good working understanding of these terms as well as an opinion on them? Wider comprehension has to be a good thing.

There has also been a shift towards people wanting their financial institutions and their government to be held accountable. Now that everybody has seen the impact of the poor financial policies of the last labour governments and the problems that can arise when the bankers are given a free rein with little or no fear of retribution, there is an increasing focus on making sure that somewhere somebody is held responsible.

This has been reflected by the recent ‘shareholder spring’. While I think this is an exaggeration, and the term is used too widely and too often, there is no denying that the recent spate of chief executives like Sir Martin Sorrell being denied their bonuses would have been unthinkable a few years ago and reflects growing popular demand for more accountability in the business world.

Furthermore, policies like the ring-fencing of the banks, which I have written about here before, illustrate a move by the Government to introduce financial legislation designed to protect the electorate. This policy has recently been watered down, but that doesn’t change the fact that political parties have recognised the importance of bringing in policies to ensure that an increasingly aware voting public are sheltered from having to bail out the banks once more.

One can quite easily argue that the Coalition will stand or fall on the success of its economic policies. And it is increasingly clear that you cannot spend your way out of a recession, despite what the Labour party might claim.

So the question confronting us now is whether the Coalition Government has enough time left for its economic policy to come good, or whether ministers need to be considering a new plan.

Rest assured that whatever the answers to those questions, the British public is no longer ignorant about economics. And if the Coalition partners, particularly the Conservative party, wants to win the next election, they shall need to prove the credibility of their economic strategy.

Follow Sara on Twitter @sarabenwell

Procrastination, prevarication & paralysis: an idiot’s guide to the Eurozone crisis

Henry Hopwood-Phillips 9.46am

I always thought that the EU had secured the winning hand.

In success, it could boast that its social democratic model, inching towards fiscal and ultimately political union, had created a permanent and enlightened route to general prosperity. In failure, the globalised proportions of its wreckage would ensure that only its supranational intervention could offer succour.

Yet the EU’s problem is that its chief creditor, Germany, has been thinking like a nation, rather than a supranational overseer. It is not that Germany is not willing to play paymaster to a transparently political project. Rather, Germany resents the fact that beneath the surface, economically the EU project resembles a cheese grater.

ClubMed, eager to ignore the holes, yearns for closer political unity because of the accompanying German credit card.

The Germans, not wanting to subsidise the European periphery forever, has suggested mandatory terms and conditions and requested appropriate collateral in return for pooling proportions of debt, privatisation, teutonic budgetary discipline, and flexible employment laws. ClubMed baulks at the small print.

The tension between German realism and Mediterranean myopia is painfully apparent. Angela Merkel has said that under no circumstances would she consider Eurobonds. Italy’s ex-prime minister, Silvio Berlusconi, retorts that if Germany continues to prevent the ECB from printing money she should quit the euro. Italy’s current leader, Mario Monti, tells the German chancellor that “six decades of integration are at stake”.

In the past, at least, political obfuscation of economic realities was intelligible while the the direction of the EU’s hopes was centripetal. However, with the EU’s economically strongest member now in direct confrontation with the rest, the outcome of the crisis is far from predictable.

The impending Spanish bank bailout ought to be as conventional as a banking crisis can be, following a relatively simple process. Nonetheless, foreign investors are shunning the prospect - not just because they believe the books are cooked but because how they might be cooked is no longer discernible. An efficient and free market should not be run on fiddled facts but it routinely is. Cynicism does not ruin markets on its own. Rather confusion over the target and form of that cynicism, as with the current EU chaos, appears to. It certainly paralyses credit flows, meaning that Spain is now required to spend $600,000 to insure merely $10 million of debt.

The president of the ECB, Mario Draghi, has identified the systemic weaknesses and trends and said it cannot continue, recently describing the Eurozone as “unsustainable”.

Exasperation is noticeable even in the EU’s own reports. Its top brass has informed the new French president, Francois Hollande, that the economic assumptions behind his budget plans are “optimistic”, measures to hit budget targets “not sufficiently specified”, and France’s record on meeting past targets has been “mixed”.

In this febrile climate, the technical solutions suggested in answer to the European crisis - from a ‘Grexit’ to Eurozone deposit schemes - seem to me to be superfluous. At this pretty pass the repair of the EU body seems more dependent on the cogency and cohesiveness of its soul than any mere physical tinkering.

As Europe sinks we should look to new horizons

Alexander Pannett 12.30pm

This week it became clear that the procrastinated efforts to save the European single currency have failed.

Greece will leave the single currency when it votes for anti-austerity political parties in a month’s time. Possibly even the European Union too if Greek anti-European sentiment continues to grow.

What must be done now is ensure the contagion does not spread to other peripheral countries: Ireland, Portugal, Spain and Italy. This may even be too late, as we receive reports of a bank run in Spain. If the markets lose confidence in these countries’ ability to manage their debts it will precipitate a collapse of the entire European banking system as capital flight prompts liquidity to dry up, as in 2008.

David Cameron has called for fiscal and political union as the only way to shore up confidence in the euro and stop it being seen as less a single currency and more a strict exchange rate union ready to be un-raveled.

The Prime Minister echoes calls from other European leaders for more concerted action to save the euro, notably via the use of ‘eurobonds’. I proposed on these pages in November last year that without further political solidarity the euro was doomed.

Political solidarity has not emerged. Instead there is growing acrimony and competing ideas. If anything, the unfolding disaster has exposed the fractious concept of common citizenship behind the entire European project, something Nik alluded to earlier this week.

There is no interest in Europe. There is only a Europe with interests.

It is not too late to salvage the ambition of closer union. But for now this can only be a Franco-German union. Only those nations who will accept being absorbed under the dictates of Paris and Berlin shall join. For the rest, the EU will remain a trading block, and an economically and politically impoverished one at that.

It seems that the great play of world history is about to leave the European stage and transpose itself to the more exciting and economically dynamic scene of Asia. Whether this new Act will be of tragedy or farce is as of yet unknown.

For Britain, we are too old an actor to play outside the limelight. Our pride is too heavy and dress bill too dear. It is time we pursued a new free trade pact with countries in Asia.

We could start with Australia, New Zealand, Korea, Japan, America, Indonesia and Singapore, perhaps with the old Commonwealth as the foundation. This could and should include those European nations that share our interests in global trade.

Such a free trade organization would also be able to promote a more responsible capitalism in global trade that protected the environment, traditional cultures and social values. Far better to promote progressive humanitarian standards by engaging with Asia rather than heckling it behind trade barriers.  

We should mirror America’s re-orientation to Asia by reversing the Suez doctrine and re-establishing naval bases in Asia. Singapore may value such a presence. This does not even have to be a military base but could be a humanitarian crisis response centre, in readiness for when another natural disaster strikes that seismically vulnerable part of the world.

Europe will still remain important to Britain. But it should be seen and supported as a neighbour. Not as our place of work.

For that we will need to travel further afield.

Follow Alexander on Twitter @alpannett

PMQs review: Score draw but the Prime Minister’s arsenal is worryingly bare

Jack Blackburn 2.08pm

The Government’s fortunes and the composure of its ministers have crumbled over recent months, though it is worth noting that the Leader of the Opposition’s polling numbers have still not managed to match his party’s.

So as we arrived at the first PMQs since April we found a leadership vacuum, created by a Government in disarray, a Prime Minister under pressure from all sides, and a Labour party leader seemingly unable to act like a leader.

This PMQs also took place in a very different context to the last. Disastrous local election results (London’s Mayor aside) for the Coalition parties still sting. The national economy seems to have tumbled into a double-dip recession. We are being badly buffeted by continuing turmoil in the Eurozone, where an anti-austerity Frenchman has just taken up residence in the Élysée palace and Greece is crippled by political upheaval.

To use a recent (and for me painful) sporting illustration, the leaders were level on points going into today’s match, with Mr Miliband ahead on goal difference. This was a mid-term fixture rather than an end-of-season cliff-hanger, but it as was scrappy, messy and confused as the Premier League’s climax, if nowhere near as exciting too.

Mr Miliband has plenty of arsenal at his disposal at the moment. Dreadful growth figures, unhappy nurses, protesting police officers, the controversial Leveson Inquiry, electoral reverses and the seemingly changing political breeze in Europe should have meant that Mr Cameron was in for a torrid time at the Despatch Box. Nevertheless, there was a crumb of comfort for the Prime Minister today in the form of falling unemployment.

Mr Cameron began by using this to his advantage, welcoming a question from his own backbenches, but stressing (as all the Cabinet has done this morning) that the Government is not complacent. There is more to be done. Etcetera. And for once, Mr Miliband also welcomed good economic news, but was quick to try to press home some advantage by questioning what discussions the PM had taken part in with President Hollande about growth plans for France and Europe.

The answer could have simply been, “Well, haven’t really spoken to him since he was elected.” So Edward suggested a text message with “LOL” in it would probably be sufficient. Uncharacteristically funny, and well delivered.

In fact, Mr Miliband’s entire style of performance has improved immensely. He is calm, considered and no longer whiny. Nonetheless, Mr Cameron remains an adept performer himself, and responded strongly: “I may well have used my mobile phone too much, but at least as Prime Minister I know how to use one rather than just throw it at those who work with me”. The Rt Hon Member for Kirkcaldy was, as usual, nowhere to be seen.

Mr Miliband was indeed more impressive today, though still blew it by failing once again to capitalise effectively on the Prime Minister’s all-too-evident woes. He left the economy debate too quickly, so eager was he to cram in questions on policing and nurses, while also failing to pose a question on his sixth time of coming. The eyes were bigger than his abilities.

Yet Mr Cameron also fumbled the ball today, particularly with his final response to his opponent, when he attempted to criticise Labour’s new policy supremo John Cruddas as someone too close to the trades unions. At moments such as those, one realises just how little ammunition the Prime Minister has at his disposal.

Does a vigneron in Rousillon shed a tear for the Greeks?

Nik Darlington 9.42am

Suppose that North-Eastern England, the region tending to be most heavily dependent on internal transfer payments, went bust, à la Grèce. Would the rest of England feel happy, or even obliged, to bail the region out? Of course it would.

Even if Scotland went belly up, despite all the rumblings of independence, the rest of the UK would come to its aid - as it did, for instance, to bail out Scotland’s biggest financial institutions (and the North-East’s, come to think of it).

But does a vigneron in Rousillon shed much of a tear for the Greeks? Or more to the point, a bank manager in Berlin? Or a station master in Stockholm?

The emotional flaw at the centre of the European Union is that however many years of postwar ‘good Europeanism’ there have been, Europe’s citizens (has that term ever felt less secure?) still feel the tug of the historic, the local and the familiar, more than the modern, the continental and the abstract.

A Greek default and eurozone exit makes dreadful economic sense, unless, perhaps, you’re Greek. Yet Europe’s emotions are directing the popular response, and, in the case of those northern Europeans with apparently unimpeachable morals, even the economic response too.

Follow Nik on Twitter @NikDarlington

Egremont’s review of 2011

Nik Darlington and Alexander Pannett 10.30am

This time last year there was no such thing as Egremont, yet in September, thanks to you, our readers, we were voted the 5th best Conservative blog in Britain in the Total Politics Blog Awards 2011.

We have been pleasantly and quietly stunned at this ascent, proof that there is room in the blogosphere, amid the shouting and name-calling, for pragmatic, centre-right commentary.

Herein a review of our year: an account of where we have come from, how we have done it and what we have covered.

Twitter. A few words on that. All our posts are automatically tweeted via the Tory Reform Group and those of us on Twitter post and share articles and comments. These are in turn shared by followers (thank you). Since February, direct referrals from Twitter have comprised 13 per cent of our page hits, slightly behind the highest, Facebook, which gives 19 per cent of our referral traffic.

These figures have fluctuated (Twitter has on occasions provided up to one-third of referral traffic) but Facebook is usually ahead. This comes as something of a surprise because it feels that Facebook’s reign as the pre-eminent social media sharing platform is over and Twitter is in the ascendancy. But there you have it. We have a Facebook page too, on which all our articles are linked, and it seems to be working by sending nearly one-fifth of readers our way. Particular thanks go to Aaron Ellis for his assistance with its running.

The power of referral traffic is very clear. Guido Fawkes provided one-tenth of that traffic - or 1,538 hits - but most of it came from one article and in a single day. Saying that, fully one-third of traffic was from search engines, a vindication of our SEO strategy and a comforting sign that readers are actively looking for us (or stumbling across us!) rather than just being told to look at us. Eighteen per cent came direct.

Paul Abbott has achieved a lot this year in his full-time guise as Robert Halfon’s more-than-capable parliamentary confrere, not least setting up the brilliant Parliamentary Academy and being a driving force behind the FairFuelUK campaign that prompted the Chancellor to cancel a planned rise in fuel duty.

But we are sure that Paul would agree with us that his most noteworthy achievement of 2011 was to cause a one-thousand-strong stampede to Egremont on 23rd November. ‘Why the Left should love Margaret Thatcher’ has had more than 2,000 unique page views and been syndicated elsewhere thanks in part to Paul’s incisive prose and winning analysis but also the mighty sway of Mr Fawkes, who kindly referred to us as ‘the Wets’ blog’ (thank you, Harry).

Generally, readership has been consistent throughout the year, with the occasional noticeable peak. The ‘big bang’ arrived shortly before the Barnsley by-election, 3rd March, as Craig Barrett’s article ‘Liberal Democrats are looking down the barrel in Barnsley’ won positive reviews (one half of the editorial team is gracious enough to concede that his learned-if-not-sensationalist commentary on Oxbridge dons was not the principal cause of attention that day).

Then on 3rd May, Stuart Baldock wrote an insightful piece about the Libyan rebels and there was poignant coverage of UN World Press Freedom Day; but the draw was Cllr Rene Kinzett’s presentation of ‘the Conservative argument in favour of the Alternative Vote’. It was a brave and well-argued article deserving of publication. Perhaps not our most ‘popular’ feature of the year if the outcome of the AV referendum was anything to judge by, but it received plenty of attention.

August is usually the sleepy month of politics but this year we had riots. On 9th August, Nik Darlington’s in-the-moment reflection (‘We know nothing, except we are all to blame for this’) attracted Egremont’s highest traffic thus far. It was syndicated on the front page of the Huffington Post and received interest from TV station Al-Jazeera.

Media website Journalisted listed the biggest three news stories of 2011 as the Arab Spring, phone hacking and the Eurozone debt crisis. All three topics received plenty of comment on these pages, humble though we would say it was. We would not pretend to be major actors in these debates, let alone lead them. We try to focus on our columnists’ areas of expertise and on less well covered issues. But we always try to ensure our coverage matches the import of events.

Our columnists this year have come from far and wide. We have been honoured to feature blogs from the former foreign secretary, Sir Malcolm Rifkind MP, from John Lamont MSP, and from current Conservative MPs, Robin Walker, Robert Buckland and Rory Stewart.

And to name just a few of our more regular commentators: we have had economic and political analysis from David Cowan, who also won a Spectator economics blogging prize in October. Former TRG chairman, Giles Marshall, always offers a thought-provoking take on the shape of the modern Tory party. Aaron Ellis brings hard work and dedication to the foreign affairs brief. Sara Benwell gives us an edge in the finer details of finance. Meanwhile Craig Barrett’s pithy and profound musings about everything from electoral politics to taxation have been consistently among our highest read articles.

For some months, Jack Blackburn, as well as being our resident expert on film, culture and theology, has been turning his hand to weekly reviews of PMQs. Jack’s ‘letter to Mrs Miliband’ in November was utterly inspired and as good a PMQs review as you will read on any national broadsheet.

Naturally, most of our readers come from the English-speaking world and as much as 80 per cent from Britain (79 per cent) and the United States (11 per cent). Canada, France, Australia, India and Germany also have sizeable followings and our readers are spread as far and wide as Sierra Leone, the Seychelles, Haiti, the Palestinian Territories, Iran, Mongolia, Peru, Latvia, Israel, Vietnam, Japan, South Africa, Sweden and even, dare I say it, Uzbekistan.

And that, as they say, is that. The end.

Merry Christmas and see you in 2012.