Whilst Cameron & Clegg large it up in Davos, (nice Swiss Ski Resort), meeting top bankers and world leaders to discuss growth, lending and bonuses  at the World Economic Forum, the latest GDP figures on the UK’s economic growth are released tomorrow followed by Bank of England Governor Mervyn Kings’ first speech of the year.

In the meantime there is a new Shadow Chancellor waiting in the wings keener to attack than Karen Brady smiling smugly at Football “pundits” Keys and Gray with that “I told you so” look on her face.

No doubt events in Davos are important but the real analysis will be on dissecting Mr King’s speech for clues on when he thinks interest rates may have to rise to combat the growing effects of inflation, or if the economic recovery is weakening to such a degree that such a change can be put off. The GDP figures will be especially interesting here.

The markets seem to have decided already that a rise is due pricing in, according to one of my city clients, a 0.75% rise this year.

Mr King will probably stick to his guns in the short-term at least about these inflationary pressures being temporary and about to rise further due to the VAT rise. Once the rate hits 4% however, the pressure could be intolerable and the markets could begin to make their own decisions deciding that the Bank of England no longer has the authority.

“Squeaky bum time” indeed, as one economist put it last week. Over to you Mr King…

For those in the property market however, the message could be interpreted that investing in property now, before rates rise, represents a good opportunity.

In very simple terms, keeping cash in a bank account whilst rates are so low and inflation is higher means that actually you are earning diddly squat, or very close to it, so putting this money into property may be a preferred option if you believe House Prices will not fall dramatically.

In areas like London and the surrounds a shortage of stock is helping to keep house prices stable and even if more properties do hit the market, these “high demand” areas look unlikely to waiver.

Coupled with historically low borrowing rates for mortgage finance, variable tracker rates from 1.99% and 2 year fixes from 2.65%, it really could prove to be one of the best times to buy in many a year.

The political soothsayers have been having a field day showing how we were the first into recession and the last out, and that the road ahead is going to be a frankly tortuous affair. Even Alistair Darling could not rule out the possibility of a dip back into the negative almost on the eve of the election.

The fact is that many economists have been caught a little short yet again with the apparent weakness of the recovery and there will no doubt be a lot more scratching of heads and gnashing of teeth in the days ahead.

So where does that leave us all? Well, I like to think I am a glass half full type of guy, (though my wife may disagree), and to be fair a 0.1% rise is a hell of a lot better than a 0.1% drop or a big fat 0! There is hope!

In fact, the International Monetary Fund, (IMF), has just raised its projection on how much the global economy will actually grow this year. It expects unemployment to stay roughly at the same levels, however they also stated that “a key risk is that a premature and incoherent exit from supportive policies may undermine global growth and its rebalancing”.

Meanwhile the World Economic Forum in Davos has begun which should provide an interesting boxing match between bankers and regulators, with many bankers railing against the Obama plans in the US already.

It is likely to be a heated few days, but everyone needs to understand that for the financial industry to move forward with confidence there needs to be a balance between financial institutions competitiveness and effective regulation.

Too much weight on either side could only add to the issues.

Meanwhile, the mortgage market seems to have a little spring in its step if early enquiry levels are anything to go by. More products are popping up left, right and centre and lenders are starting to get back to doing what they should be doing, lending.

I don’t expect too much to change leading up to the election, with the main issues potentially coming with a hard budget by the new Government, whatever the colour. Together with the end of support like the car scrappage scheme and Quantitative Easing, as well as measures to start cutting the deficit there are some undoubted tough times ahead.

Whilst we all want decisive action to get us out of this mess, as with any issue, there is a danger of being too decisive and over-correcting.

Whether we will indeed be limping for a generation remains to be seen, so sing us out Dr Robert, sing us out.