Willie Walsh likes to tell it as it is.

Recent weeks have seen smatterings of good economic news. Sectors that took the full weight of the recession last year said they were staggering to their feet now spring is here.

Retail: John Lewis had its best week of the year so far from 2nd-9th May.

Leisure: Pubs group Greene King said things have ‘generally improved’ since the start of the year.

Then along comes the British Airways CEO to spoil everyone’s fun.

“I see no signs of recovery anywhere,” Willie Walsh told BBC radio’s Today programme following publication of the airline’s full year results. “Globally we see economic conditions continuing to be very weak. We have a global network so we are operating in pretty much every country around the world, and what we see is pretty much the same everywhere.” Cheers Willie.

British Airways’ numbers are an absolute horror show. Having made a record profit in the year to March 2008, it managed to set another record last year – this time for losses. Its fuel bill nearly doubled to three billion pounds. It is losing passengers hand over fist, grounding planes, slashing thousands of jobs – Walsh himself has even waived a year end bonus.

And now he warns of more of the same. So should we listen?

Walsh describes his company as an “excellent barometer of what is happening in the world today” and it is hard not to agree. Air travel is a luxury for the confident consumer, and there are clearly few of those. It is also a sign of a thriving business – sending staff off to New York (usually on BA) to thrash out the latest deal.

BA’s premium (first and business class) traffic is falling by double digit percentages every month. That tells its own story. Shops and pubs may have started to welcome back the punters, but air travel is a far more revealing indicator of what is really happening.

Don’t talk to Walsh about ‘green shoots’.

The recession is bringing back the strangest characters.  Rising from their graves like the zombies in Night of the Living Dead are people we thought had been buried decades ago.

The Milky Bar Kid is one, Persil mum is another and, inevitably, the Hovis bread delivery boy struggling up his cobbled hill while the brass band plays on.

What next? Bing Crosby singing about Shell perhaps or the famous Smash-peddling Martians who thought it was so funny that Earthlings bothered to peel potatoes?

Advertising experts believe nostalgia works because it takes adult consumers back to a time when they were young and without any worries. Never mind recession, the old ads say, these are value brands that have stood the test of time.

Marks and Spencer has been trying a similar tack with the launch of its 75p plain jam sandwiches. “For those who haven’t eaten one for years, one bite takes you straight back to your childhood,” runs the blurb.

The old ads are peculiarly effective transports to the past. Some of us go so far back we can still hear the jingle from Esso Blue adverts and remember those gobsmacked housewives comparing the whiteness of their newly washed sheets with Daz man. Ah, takes you back …

Are there any old adverts that you would like to see come back?

(Hamlet cigars - Ed)

--Gerard Lyons is chief economist at Standard Chartered. Any opinions expressed are his own. --

Britain is clearly a Jekyll and Hyde economy. Or that at least is what the Chancellor would like us to believe. The bad news we are now seeing in the economy, public finances and across parts of the financial sector will not last. We are in the Mr Hyde phase. But, don't worry, we will soon be back to the normal Dr Jekyll soon.

The Chancellor believes the recession will end by year end. That is credible. But then he believes recovery will be rapid, and after contracting 3.5 percent in 2009 we will see growth of 1.25 percent in 2010 and 3.5 percent in 2011. This is fantasy, particularly as this rapid rebound is expected to occur not only as the legacy of the debt bust lingers on, but also as fiscal policy is tightened aggressively through significant tax hikes, largely on those on high incomes.

Strong growth, tax increases and efficiency savings are, the Chancellor believes, about to reduce the budget deficit by half over the next four years. I have my doubts. The legacy of this borrowing binge will live on for much longer.

What we saw confirmed today was the UK was returning to high borrowing, high debt and - in our view - much weaker growth than the Government believes. Add in the higher regulation that is likely to hit, and one wonders how the UK will prosper as the shift in the new world economic order, which is already underway, gathers momentum. As we see a further shift in the balance of economic and financial power from the West to the East, to those economies with low taxes and which save and invest, how will the UK be able to prosper?

There were three areas to focus on in the Chancellor's Budget speech:

The first thing to note was how the Chancellor tried to prepare us for the bad news he was about to deliver. It is not our fault he said. The Chancellor had a number of defences: he had already taken measures to help, the downturn was global, all forecasts had been reduced not just his, and as bad as this recession is, he outlined a relatively quick rebound to strong growth, which in turn would allow government borrowing to fall. Robert Louis Stephenson would have been proud.

One could not argue with the Chancellor's opening paragraphs when he highlighted the shocks that have hit in recent years, and the global nature of the financial and economic crisis. Moreover, he used this as justification for the measures already unveiled, claiming credit for the boost he provided in the Pre-Budget Report at the end of last year. He claimed the total support provided would safeguard half a million jobs. And he announced further measures to help employment today.

These measures are to be welcomed, it is vital to keep youth unemployment to a minimum. But even with this, unemployment will rise sharply, and for some time. Although the Chancellor made the best of a bad job in delivering his Budget nothing could hide the poor underlying foundations on which he built his story. The Chancellor believed the economy's underlying strength, in terms of its diversity, flexibility and resilience would allow it to recovery soon. Yet the economy is not only fragile, it is already cracking under the pressure of the debt overhang.

The second focus was that the economic numbers are too optimistic. But one would not have expected anything different. His forecast of -3.5 percent growth for this year and of a recession ending before the year is out are credible. Confidence is a key factor in any recovery, but one wonders whether those who have cut their discretionary spending will feel the urge to go out and spend? I doubt it. And without a rapid recovery in spending, firms will be reluctant to invest. And if the recovery is weaker, debt levels will be higher, and the pressure to curb public spending aggressively will grow. No sooner had the Chancellor sat down, than the IMF released its new forecast for the UK, of -4.1 percent this year and down -0.4% next. We expect -3.7 percent this year and sluggish growth of 0.4 percent next.

Third, the budget numbers. Six months ago the Chancellor was badly out in his projection of where the budget deficit was heading. That needs to be taken on board when you hear the Chancellor's prediction for the fiscal outlook now. Even during the good times, when the economy's growth was more stable and predictable, the Treasury was often out in its predictions on the budget deficit. It only takes government spending and tax revenues to be out slightly for the budget numbers to be far different from those planned.

Thus the fiscal numbers unveiled should be viewed more as a message of hope, rather than a forecast. The budget deficit, the government believes, will peak at £175 billion this fiscal year, stay around that level at £173 billion next, before heading lower to a still high £97 billion by 2013-14. But as the headline numbers fall, the government's net debt will continue to climb, from a ratio of 55.4 percent of GDP now, to 76.2 percent of GDP by 2013-14. What if growth disappoints?

What if tax revenues are hit harder? Even on the upbeat economic views presented today the Government will have to borrow £703 billion over five years. Financial markets will not be convinced that this Budget will return public finances to a sustainable footing, as the Chancellor hopes it will.

Clearly the likelihood of an election next year, and not just the extent of the recession, had a bearing on the actual measures unveiled The Budget provided a stimulus of £5.2 billion to the economy this fiscal year of 2009-10, followed by a small tax hike of £0.1 billion in 2010-11 and a large tax hike of £5.23 billion in 2011-12, with that claw back set to continue in subsequent years.

At the time of the Pre-Budget Report I referred to it as the Good, the Bad and the Ugly: good that the Chancellor was taking timely, targeted and temporary measures to help the economy; bad that he was not doing it from a position of strength; and ugly being the fiscal position he would leave the country with. Today the picture is even uglier than before.

All we’ve heard for the past few weeks is how little room there is for Labour to pump more money into the economy to fight the recession.

The increasingly popular — and confident — opposition Conservatives have gained ground by blaming Prime Minister Gordon Brown for turning the public purse into a public hearse.

But there are a few reasons to suspect that when finance minister Alistair Darling steps up to the dispatch box tomorrow, he will deliver another blockbuster life-support package.

Yes, there are inklings of a recovery out there — some experts say we have reached the bottom — but Labour has to make sure this recession is long gone before it can hope to win an election.

And it only has until mid-2010 to wait before that day of reckoning must come.

Brown might be willing to chance his arm with some big spending to reassure the public that job losses will be kept to a minimum and that Labour cares more about ordinary peoples’ lives in the here and now than it does about the budget deficit and government debt markets.

If this is the worst economic crisis for decades, then there is no easy way out of it and the best thing to do is to take whatever action is necessary to bring it to an end and worry about the consequences later.

Respected think tank the National Institute of Economic and Social Research has called for a temporary 30 billion pound stimulus aimed at stuffing employers and employees coffers with
cash.

They say the level of government debt is nowhere near where it was at the end of the Second World War and so there is no real panic about getting it back under control eventually. Yes, it may mean higher taxes and less public spending in the future, but that might be a fair price to pay to avoid mass unemployment and social unrest.

All the indications are that Labour won’t risk the ire of experts and opposition alike with another big stimulus, but the truth is they won’t get a second chance to reduce the severity of the downturn.

Besides all that, something interesting was happening in Westminster on Tuesday.

Rather than hounding the Prime Minister’s office with questions about the Budget, Britain’s press pack were jumping all over an emergency announcement on how rules governing the much-maligned MPs expenses system might be changed.

It wouldn’t be the first time that Brown has put up a smoke screen before delivering a knockout, headline-grabbing blow.

Bumper budgets are a tried and tested vote winner … but that might also be just what the economy needs.

With Alistair Darling set to issue the gloomiest budget in a generation, nobody would actually like to be in the Chancellor’s shoes. But put yourself there for a moment and ask yourself, what would your Budget look like?

With a gaping hole in the country’s finances, Darling looks set to admit the economy will shrink at its fastest rate for 60 years. The Budget statement will also come just after new figures are expected to show another 120, 000 signed on for unemployment benefits last month.

Possible measures the Chancellor hopes will return the economy to growth include an increase in individual savings account (Isa) limits, the introduction of a subsidy for trading old motors for low emission cars, changes to the stamp duty threshold and the introduction of a new 45% top-rate income tax band.

What would your Budget include? Which taxes would you cut or raise? How would you help job seekers, homeowners and savers?

House prices have dropped, interest rates are low and plenty of people are straining at the leash to get on the housing ladder.

Now the Nationwide Building Society says house prices have risen for the first time since October 2007. 

The Nationwide cautioned about jumping to conclusions on the basis of one month’s figures but the news was enough to send the pound up against the dollar and some analysts said it was more evidence that the battered housing market may be recovering. 

On the other hand mortgages have become much harder to get and rising unemployment is working against any recovery.

What do you think? Is it premature to start talking of green shoots in housing?

From the cosy fireside chats and walks in the woods of 30 years ago, world summitry has expanded beyond all recognition, with this week’s G20 meeting in London being billed in some quarters as the biggest gathering of leaders since 1945.

But the problems now are of course much bigger too. Long gone are the days when a few soothing words about co-operation on currencies would be enough to declare a summit a success.

This one, Gordon Brown hopes, will produce a “grand bargain”  that will lay the foundations for a new global economic order, and in the process improve his own domestic political fortunes.

But the run-up to the summit has revealed fundamental differences in what the participants want to achieve — for a resume of what is actually likely to emerge click on our full coverage page.

What is your opinion on this week’s meeting? Is it just expensive diplomatic grandstanding or are the world’s economic problems now so severe that only a conference of such size is appropriate? And what would you like to see come of it?

Stopping off in New York during a marathon, 18,000-mile diplomatic offensive before next week’s G20 summit in London next week, British Prime Minister Gordon Brown recalled a conference held in eerily similar circumstances in London 76 years ago.

Sixty-six nations gathered for the June 1933 London Monetary and Economic Conference which was aimed at lifting the world’s economy out of the Depression.

But amid American opposition to European plans to return to a system of fixed exchange rates, the conference collapsed and the world put up trade barriers, jobless ranks swelled and the rise of Fascism took the world into war.

“There was no further progress other than a resort to protectionism for the rest of that decade,” Brown told a business audience during a five-day pre-summit tour that has taken him to the European Parliament in Strasbourg, New York, Brazil and Chile.

Brown must be hoping desperately that history will not repeat itself when he hosts a meeting of leading industrial and developing economies in London on April 2 to try to chart a way out of the worst global financial crisis since the 1930s.

Again there have been signs of transatlantic division in advance of the summit, with many Europeans resisting U.S. pressure for more fiscal stimulus to boost the economy, while the Europeans put the emphasis on tightening regulation of the financial sector.

Mirek Topolanek, prime minister of the Czech Republic which holds the current European Union presidency, was quoted this week as saying U.S. President Barack Obama’s huge economic stimulus plan was “the road to hell”.

Many countries are suspicious that their neighbours are resorting to protectionist policies to try to safeguard jobs at home.

Currency questions have caused friction between the United States and China, whose economies are now closely inter-dependent. Paul Volcker, a senior Obama adviser, gave short shrift to China’s proposal for a new world currency when asked about it at a New York roundtable with Brown this week.

Volcker said he understood restiveness about the “lopsided nature” of the current international monetary system but he said pointedly that the Chinese “didn’t have to buy those dollars in the first place”. A new international monetary system which suddenly devalued the dollar’s role was not practical, he said.

As Brown jetted around the world to bolster support for concerted action to lift the economy, he came up with a variety of ambitious and expensive proposals to revive trade and get the economy going again.

But he runs the risk of setting expectations for the London meeting too high, perhaps bringing crushing disappointment in its wake.

“If the G20 becomes a meeting just to set another meeting, we’ll be discredited and the crisis can deepen,” Brazilian President Luiz Inacio Lula da Silva said at a press conference with Brown in Brasilia.

Brown’s G20 envoy, Mark Malloch-Brown, voiced similar fears earlier this month. “If indeed we get anodyne committee conclusions where all substance has been taken out of them, the markets on April 3 will be something of a disaster zone, I have no doubt,” he said.

Brown has called for a doubling of IMF resources to $500 billion and for a $100 billion trade financing facility to help reverse a slide in exports. He has also called for an insurance policy for countries with big foreign currency reserves, such as China, so that they will feel able to use some of their reserves to boost the economy without fearing a run on their currencies.

U.N. Secretary General Ban Ki-moon, who Brown met in New York, urged the G20 to support a $1 trillion stimulus plan for developing countries.

With so many other demands on their cash, it is doubtful that even the powerful G20 economies will be able to find the vast sums needed for all of these programmes.

The huge media focus on the gathering of Obama and other world leaders in London, and the big protests that are expected to accompany it, will only heighten the anticipation.

British officials are trying to dampen expectations that a big new fiscal stimulus package will be approved at the G20 summit, saying they do not expect countries to put their national budgets on the table next week and suggesting that the results of the summit will be seen over the next year, rather than on the day of the summit.

Harsh economic reality may also force Brown to rein in his own wish to pump more resources into the British economy.

While he was away cheerleading for the G20, events back home kept intruding.

First — in a move one opposition lawmaker described as a “coup” — Bank of England Governor Mervyn King warned the government on Tuesday that its soaring budget deficit meant it would have to be cautious about any new stimulus for the British economy.

On Wednesday a sale of British government bonds failed for the first time since 2002, sending a warning to Brown that the markets may balk at financing ever higher British government deficits.

Then on Friday, Brown was given a lesson in economic management by Chilean President Michelle Bachelet who described how the money Chile had put aside in good economic times had enabled it to pump more cash into the economy during the downturn.

Brown’s Conservatives opponents at home say this is exactly what he failed to do during the years of prosperity – reduce the budget deficit so he had more financial firepower to help people through a recession.

As his ambitions clash with harsh reality, Brown may have to lower his sights both for the G20 summit and for the British economy.

[Photo: Prime Minister Gordon Brown (L) listens to Brazil's President Luiz Inacio Lula da Silva during a news conference at the Alvorada Palace in Brasilia March 26, 2009. REUTERS/Roberto Jayme]

Gordon Brown has not said openly that he plans to turn on the taps again in the budget with another package of spending and tax cuts, but his appeals to world leaders to do just that have led to a widespread feeling that more stimulus is to come.

So Mervyn King’s warning against more spending when debt levels are already so high has predictably been leapt upon by the Conservatives as a powerful message of support for their own position. 

Do you believe the way to beat the recession is to stimulate the economy with more spending, as Brown wants, or with  a more cautious, steady-as-she-goes approach as favoured by the Conservatives?

And should the Bank of England governor be straying so far into political territory?

The energy regulator has said that it is considering a ban on unjustified price differences in the energy market to address concerns that customers are being charged differing amounts according to their payment methods.

Ofgem also said that it was planning measures that will improve customer service, including simplified information about tariffs to help people decide whether they need to switch supplier.

All of which could lead to cheaper bills for energy customers. But until this happens, there are a number of simple steps you can take to reduce your household bills.

The website 0870buster.com, which has only just launched this week, will help you to cut down on your phone bill. The site is a free telephone directory that provides alternative numbers for companies at a standard rate instead of the usual premium rate numbers.

Switching your gas and electricity suppliers, meanwhile, can save you hundreds of pounds a year. Thisismoney.co.uk will help you work out how much you could save a year by switching to a cheaper supplier. The results will be more accurate if you have a bill to hand, but you can still use it if you do not.

The site, with the help of energyhelpline.com, will also help you to make the switch once you are ready.

Unravelit.com helps you to save money on household and personal bills by allowing you to compare prices on numerous products, including gas and electricity, insurance, phone bills, credit cards, broadband and loans. It also offers information about switching for business owners.

There are also savings to be made on water bills. This moneysavingexpert.com guide to cutting water bills compares meters and regular billing to help you work out what is best for you and possibly saving you a few hundred pounds a year in the process.