This is the toughest and most challenging year for the economy.

We need to make our economy more pro-competition and pro-enterprise. Wherever there are barriers to companies, we will remove them.

A world class economy will need world class education - and that means continuing to reform our schools.

Even if the local economy stays strong in 2006, as many analysts project, it is difficult to imagine that significant improvements can be made over the 2005 figures. From a historical perspective, last year was exceptional.

The British economy of the future must be built not on the shifting sands of boom and bust, but on the bedrock of prudent and wise economic management for the long term. It is only these firm foundations that we can raise Britain's underlying economic performance.

The best you can say is that the German economy remains in dire straits and under duress and as far as what it means for policy... it's a beacon call to the ECB to cut rates,