Household debt service payments are higher now than at any time since Labour came to power in 1997. And growth in retail sales is also down to about its lowest level since then.It is impossible not to note also the relationship between house prices and consumption. Here in the UK the mid-cap index is around its all-time high, though the FTSE 100 index still has some way to go.On the other hand, three out of the past four world recessions have been triggered by a sharp rise in energy prices, the exception being 2000-2001 which was set off by the collapse of the communications investment boom. In the UK and US consumers are heavily indebted, so indebted that in the UK the Bank of England has been pushed into its first cut in rates. And no major developed country has much leeway in fiscal policy and hence little ability to pump up demand by going further into deficit.You can see some of these signs of strain in the graphs. There are signs of strong health; for example, the surge in profitability and productivity of US companies.

There is some slack in most economies, and an enormous amount of it in three of the G7 countries: Germany, Italy and Japan.These positive factors have helped support share markets, which have now recovered a large part of the ground lost since the peak in 2000. The former affects everyone, the latter – in the first instance at least – mainly the US. But the world economy is so interdependent that were the US to slow significantly, this would also feed through to the rest of the world. So we are all in this one together.The evidence, as usual, is mixed. Intuitively, it feels too early to be calling the top of this cycle. Looked at globally we are only four years into the expansion phase, which historically would put us about halfway though it. But the US is increasing its interest rates now and faces similar problems of indebtedness, and the only reason the European Central Bank has not increased rates is that domestic demand has been so weak in much of the region.
To this general slowdown have come the specific blows of the rise in oil prices and Hurricane Katrina.

The slowdown has been particularly evident here in Britain, partly because the UK was running closer to capacity than most developed countries and partly because we therefore saw an earlier tightening of monetary policy. Sir Roy will be a hard act to follow.j.warner independent.co.uk. Is this just a mid-cycle pause, albeit a rather deep one, or are we catching a glimpse of something more alarming?

It does not matter whether you look at the UK economy or the global one: there has been a clear loss of momentum in recent weeks. The new chief executive, whoever it might be, may not even get the chance to get his feet under the table.Sir Roy has done an outstanding job at Centrica since it was demerged from British Gas, complete with the toxic waste of unwanted take or pay North Sea gas contracts.

True, the subsequently pursued multi-utility strategy didn’t really work. Sir Roy has already sold the AA and Onetel is likely to follow shortly, but both have succeeded in delivering great value to shareholders. Because the scheme would be nationally administered, say through the PAYE system, charges could also be kept to a bare minimum. But would the Government back such a bold approach? Answers, Mr Blunkett, please.Gardner’s question time at CentricaAny hope that Mark Clare, the deputy chief executive of Centrica, might have had of stepping into Sir Roy Gardner’s shoes when he retires as chief executive next year is likely to be dashed today when the company announces it will be looking outside for a successor.This is unfair on Mr Clare, who is the operations man at Centrica and has been a loyal deputy to Sir Roy through thick and thin, but it’s the way of the world and he shouldn’t be too downhearted.If stock market speculation is to be believed, Centrica will soon find itself on the receiving end of a takeover bid.

Government willing, I suspect he’ll eventually opt for some version of the auto-enrolment system which is being adopted in New Zealand. Here the idea is that employees will automatically have 5 per cent of their earnings deducted and saved via a state-administered but privately invested scheme unless they deliberately opt out.This neatly gets round the charge of compulsion as well as allowing employees the flexibility to save when they can. What he did say was that if you compel employers to contribute to pensions it would only be at the expense of cash wages. This is what happened in Australia when compulsion was introduced.As for compelling employees to save, the problem here is that it is difficult for the financial services industry to sell pensions to people on average earnings and below at annual management charges sufficiently high to make a profit and sufficiently low to prevent the saving being substantially gobbled up by the charge.No easy choices, then Yet Mr Turner has to recommend something. Many employers do not see it as their role to provide pensions simply for reasons of social responsibility, with cash wages seen as more attractive to most employees than the deferred pay of any pension promise.So what about compulsion, seen by the TUC and others as the way forward provided employee contributions are matched by employers On this too, Mr Turner was giving little away.