The pattern of growth in the real economy is in some sense a mirror image of what was happening a year ago. Then there was considerable concern that stagnating international trade was depressing the performance of manufacturing at home and, through this, having a damaging effect on economic growth overall. Now there are the first signs that output growth is being led by a revival of manufacturing which, in turn, is probably linked to a revival of world trade. A year ago the US$ was close to record highs against the euro and sterling had been dragged up in its wake. Now a weakening US$ is taking sterling with it, so the exchange rate against the euro, although still high, is well below the values of last year. At the same time share prices have fallen from levels of last year which, although below their peaks, were still grossly inflated. At current levels they will once again encourage businesses to make sensible use of shareholders' capital and come to sensible decisions about appropriate forms of financing. On the other hand the recent growth rate of house prices is likely to prove unsustainable.