Supply side reforms are tempting but hard to implement given the state of public finances. There is a need to invest in skills and infrastructure but short to medium run returns on such investments are probably low to modest (and it would be wrong to not focus on longer term returns when selecting such projects). Worker retraining, again, might be needed, but should not expected to bring about a large short to medium run boost to the economy. Boosting labor market participation may be more promising, but unemployment is already low, real wages have stagnated in the UK for decades now, and there is probably important selection effects in labor market dropouts. Repairing public finances will not bring about a boost in the short term. There is some low hanging fruit though: Reentering the EU single market. This would boost public finances and the economy.

I think there were initial doubts about the ECBs willingness to increase the policy rate in the face of "fragmentation risk" and continuing credit policies. Once the ECB starting signalling that it would increase rates, the Euro recovered. On the real economy side, we now see Europe - Germany in particular - coping much better without russian energy imports than feared by some. In combination, this hopefully signals that the economy will be less prone to a significant downturn than previously thought and that the inflationary pressures will be contained.

I think a broad suite of policies are needed included some of those mentioned such as investment in human capital, foreign trade, and reforms to welfare systems providing both better social insurance and improved access and incentives to a good life for those coming from more challenging socio-economic backgrounds. There may also be a need for considering regulatory frameworks ensuring a better functioning market economy. On the positive side, the UK economy has some fundamental strengths which it can build upon and which possibly would increase the payoffs of undertaking these policies.