On the one hand we seem to have £100 billion in excessive government spending on welfare and the NHS which seems unbridgeable with much lower growth baked into the economy along with long-terms constraints on pay due to productivity being lower and immigration meaning there is an over-supply of labour.
Then there is the impact on the monetary economy. When the Banks were short of liquidity - and the economy to, the UK splurged £350 billion in quantitative easing and dropped interest rates to 0.5%. This should have driven up inflation, but the sheer destruction of money caused by the losses on financial assets seems to have prevented this.
So, with oil prices and commodity prices falling there is every chance the UK may experience deflation early next year rather than inflation.
Since 2010 analysts have always said the first inflation rises are six months away. Typical analysts really when it comes to forecasting the future, all agreeing about some fuzzy movable point in the future.
At the end of 2014, fully 4 years after rates were to have risen and indeed 'normalised', we are further away than ever from rates going up. In fact, it is hard to make any case at all to raise rates next year - potentially to cool a housing bubble, but that would be a very blunt tool for that job.
It seems there will be no interest rate before or indeed after the election. We will have record low rates for the meantime with all the benefits and problems that it causes. The Zombie economy will continue as the UK follows the 1990's and early 2000's path of Japan to a pancake economy with ever rising public debt.
