UF ORDER OF OMEGA

It acknowledges that the country is doing better than Italy but points out that growth can take place despite structural weakness.In the case of the US, the link between a strong economy and a weak administration is more tenuous. President Bill Clinton presided over the 1990s boom but that had run its course by the end of his tenure. There has been a reasonable recovery under George Bush, who has arguably been a weak leader. The third graph shows pretty stable growth through this period, despite a recent wobble in confidence. Maybe, with the President becoming still weaker, the recovery will last another couple of years.As for Japan, well, there has been the long-awaited recovery of the past three years.

But whether that should be associated with a (relatively) strong prime minister is another matter. Maybe Japan is the exception.What happens next as far as our own economy is concerned? In the past few days, the mood has changed. Instead of the main worry being a slow-down in growth, it has become one of a speed-up.There are several bits of evidence here. One is the rise in services (and to some extent manufacturing) confidence evident in the left-hand graph. Another is a turn-up in the housing market, with prices now clearly increasing again Retail sales are a bit less gloomy too. And employment seems to be climbing again, though so too is unemployment - maybe a result of the expansion of the workforce after migration from the new EU member states. We will also benefit a bit from the rise in demand in Europe and maybe from some modest depreciation of sterling against the euro.As a result, the broad expectation now is that the next move in UK interest rates, instead of the being down, will be up.

That won't happen until the autumn, though, and in any case there is always a danger of some external shock. The contrast between confident financial markets and concerned global politics remains as stark as ever.That is the background to what is really quite a substantially modified government. There is no change at Number 11, of course, but the concerns about competence that led to the election reverses, and hence the scale of the reshuffle, extend to the work of the Treasury and its plan to expand spending so rapidly on a basically unreformed NHS. In private, Mr Brown would dismiss concerns about falling productivity in the NHS, even when these became evident.

The Treasury has also repeatedly missed its revenue targets, which smacks of poor planning.As a result, the pressure on the Home Office and the NHS to get it right instead of getting it wrong will extend to the Treasury. It is already having to row back on some of the technical changes proposed in the Budget.So, with luck, we will have a period of calmer government. And the calmer government is, the easier it is for the rest of us to plan. Whether it will become more competent, we will have to wait and see, for the instinct to set yet more targets seems deep-rooted - and excessive reliance on targets is one of the things that has gone wrong.But the notion of a government that does fewer things but better is an attractive one.