Although the Queen’s speech on Wednesday is a formal occasion to outline the government’s agenda for the new parliamentary session, with less than six months to go before a general election, commentators are viewing it as the unofficial launch of Labour’s campaign.

Tony Travers, director of the Greater London Group at the London School of Economics, outlines some of the challenges the parties face before elections, which must be held no later than June 2010.

The title of this post is taken from two sources. One was a headline in British tabloid, The Sun, in January 1979, when then-prime minister James Callaghan denied that strike-torn Britain was in chaos. The second was the title of a 1975 album by prog rock band Supertramp that famously showed someone sunbathing amidst the grey awfulness of the declining industrial landscape.

Are we now getting blasé about the latest crisis? Not so long ago, perfectly respectable economists and financial analysts were talking about a new Great Depression. The world was on the brink, it was said. Now, though, consensus appears to be that it is all over bar the shouting. The world is safe.

Wealth managers at Barclays have gone as far as telling their clients to get over it.

Move past the crisis .... The past year's events were deeply traumatic for most investors, but now is the time to move on, and take a more "business as usual" approach ...."

Such bullishness may not be comforting to the record numbers of jobless in parts of the world, but it is bordering on consensus. It is left to the likes of perma-bears such as  Nouriel Roubini to try to burst the bubble of optimism on which many are floating. The economist began one of his latest articles bluntly:

Think the worst is over? Wrong.

Roubini's main point is that unemployment is likely to get worse rather than better and that many U.S. jobs that have been lost will not come back.

Now, there can obviously be a disconnect between markets and economics, but the former tends to be based on assumptions about the latter. So which is right? Are we out of the woods? Or should Supertramp be firing up their keyboards again?

Amid the turmoil of the 2008 financial crisis a myriad of events unfolded that the general public knew nothing about, writes New York Times reporter Andrew Ross Sorkin in a new book titled "Too Big to Fail."

Wall Street fell from the dizzying heights of good fortune to calamity in a matter of months. To a large degree it's still to early to tell whether financiers and politicians involved made the right choices.

"At its core 'Too Big to Fail' is a chronicle of failure -- a failure that brought the world to its knees and raised questions about the very nature of capitalism," writes Sorkin in his behind-the-scenes account.

He spoke with Reuters before giving a lecture at the London School of Economics on Thursday.

When the Bank of England decided to expand its quantitative easing policy by 25 billion pounds to 200 billion on Thursday, it was essentially hedging its bets.

After Britain's economy shrank unexpectedly in the third quarter, and with two thirds of the City expecting an expansion to the QE programme, simply shutting off the tap of government bond purchases would risk being more of a shock than the economy could bear.

On the other hand, the Bank clearly believes that the worst is over for the economy and that recovery will come soon -- even if it's going to be weak.

Thursday's decision means the central bank will keep buying government debt until February, but at only half the pace of before. This still amounts to around 2 billion pounds a week, not including the much smaller sums of corporate debt that the Bank is buying.

What the decision means for a typical household is harder to calculate. The Bank says that its quantitative easing programme has raised the price of government and corporate
bonds, making borrowing cheaper.

But for average firms and consumers looking for a loan, the benefit is harder to spot.

There is little clear evidence that banks are much more willing to lend than a few months ago -- though the Bank would argue that quantitative easing has been instrumental in avoiding the recession turning into a depression.

In the longer term, the big unknown is the impact that quantitative easing will have on inflation. Sterling's weakness against the dollar and the euro will push inflation up in the short term, and going forward the Bank of England said it faced a balancing act.

While rising unemployment and half-full shops and factories will keep a lid on prices, policymakers know that quantitative easing could exert upward pressure on demand and prices for months if not years after it has stopped.

That's why they took the decision today which could mark the gradual phasing out of this unprecedented policy of asset purchases.

Recent U.S.  gross domestic product data show the world's biggest economy emerged from recession in the third quarter, while in the UK data show that in the same period Britain's economy contracted.

British economist and author John Kay theorizes that Britain is mired in its worst recession on record in part because government support has not been evenly distributed across sectors.

"We've poured money into the financial sector -- by and large the financial sector in Britain is doing OK," he said.  "But very little of that is getting through to small and medium-size businesses out there in the rest of the economy."

Even if a deal is reached among political delegates at the upcoming United Nations Climate Conference in Copenhagen, it is unlikely to set out specific emission targets, says Mike Hulme, author of "Why We Disagree About Climate Change" and a professor at the University of East Anglia in Norwich.

"What we've done with climate change is to attach so many pressing environmental concerns to the climate change agenda that trying to secure a negotiated multilateral agreement between 190 nations is actually beyond the reach of what we can achieve," he argues.

Hulme, who will take part in a debate hosted by the Institute of Economic Affairs in November about carbon emission policies and economic activity before he heads to the Copenhagen conference, discussed his views with Reuters.

Britain's FTSE 100 seems to be almost impervious to any bad data that can be thrown at it. GDP data shocked the market showing the UK unexpectedly contracted in the third quarter.

Sterling tumbled more than a cent against the greenbackand gilts jumped while the FTSEurofirst 300 pan-European equity index trimmed gains considerably.

But Britain's FTSE shrugged it off, hugging its 1 percent gains in the face of data which shows the UK economy is still ailing badly.

 It is the cosmopolitan nature of the FTSE which is keeping it buoyant. Miners and energy firms make up over 32 percent of the index, while miners banks, also very much global institutions make up a further 16 percent.

Howard Wheeldon on BGC Partners says:

"The FTSE is a function of globalalisation and trading conditions and growth elsewhere in the world have more of an impact than domestic growth. If the global recession is over and demand is picking up internationally, it's all the more reason to close your eyes to
what's going on in the tiny island that it happens to be registered in."

Opposition leader David Cameron has delivered his speech to the Conservative party conference in Manchester.

Cameron told delegates there would be “painful” cuts in public spending, promised to send more troops to Afghanistan and stressed the importance of confronting “Labour’s debt crisis.” He also pledged to modernise the pension system, “break the cycle of welfare dependency” and cut back on bureaucracy to make life easier for entrepreneurs.

Cameron’s speech brings conference season to an end. Leaders of the three main parties — Cameron, Prime Minister Gordon Brown and Nick Clegg for the Liberal Democrats — have all laid out their plans for Britain ahead of a general election due by June 2010.

The ‘word clouds’ below have been generated using the complete texts from each of the leaders’ keynote conference speeches, in the order they were given. At first glance there are some striking similarities and fascinating overlaps — but we will leave it to you to draw your own conclusions.

How did you think each of the leaders performed? Who did you find the most convincing? Is David Cameron ready to lead the country?

Keywords from Nick Clegg’s speech:

Keywords from Gordon Brown’s speech:

Keywords from David Cameron’s speech:

Prosecute over bribes allegedly paid in far-flung lands years before you banned such practices?

That’s the bluff from Britain’s Serious Fraud Office and its biggest defence firm, BAE Systems, is having none of it.

The Lockheed scandal of the 1970s forced the United States to toughen its anti-bribery laws but the British quietly left their laws wide open for decades.

It worked a treat.

UK firms enjoyed a competitive advantage over U.S. rivals and were able to do battle in arms exports versus freewheeling rivals from France, Germany, Russia and beyond.

BAE is now Europe’s biggest defence company and has even cracked the Top 10 in sales to the Pentagon.

Britain’s economy has profited too, especially from the Al Yamamah arms-for-oil export pact with Saudi Arabia – at an estimated 43 billion pounds ($69 billion) by far the country’s biggest ever export deal.

Remember it? It’s the one the Serious Fraud Office probed until late 2006 when then Prime Minister Tony Blair, under pressure from the Saudis and citing national security, quashed it.

Turning a blind eye is sometimes hard, but a 43 billion pound eye patch does wonders.

The Serious Fraud Office has been smarting ever since.

So it is back, mounting a stand, hoping to reassert its authority with a case involving BAE and far smaller defence deals done in South Africa, the Czech Republic and Tanzania.

It’s true, regulation is back in vogue, with politicians busy talking the world back out of recession and vowing tougher rules to avert another financial meltdown.

Little about how they all missed this crisis, but a lot on the great ideas they have for spotting it next time.

The Serious Fraud Office’s sleight-of-hand is even more breathtaking.

They want time travel — to use today’s laws to prosecute yesterday’s crimes.

Can they be serious?