Strong hints from the IMF suggesting that Chancellor George Osborne may possibly need to further raise taxes and achieve even more spending cuts if government deficit targets are to be achieved together with the timely reminder that Britain’s economy has ‘less capacity to grow quickly over the next few years’ means that there is little in the way of cheery news to be found in the newspapers today. Yesterday was little better with even more negative data that suggested manufacturing growth has now all but ground to a halt. Across the pond life in the US isn’t that much better with day by day increasing amounts of negative macro data that suggest the US economy is fast slowing down. Across the English Channel I am afraid life across much of Continental Europe can hardly be described as good albeit perhaps that the European sovereign debt crisis does appear to have allowed itself to be calmed into a temporary August vacation lull.

Over in the US the rather neat crafting of a bipartisan deal on debt that should with a little more argument and debate complete its final passage through Senate later today will surely take some of the heat out of the market although that should not be taken to mean stocks are about to shoot up. Sceptics of the deal remain and raising the national debt limit level on the back of yet to be detailed deficit reduction plans that will contain no element of tax raising ability may be considered as fiddling whilst the rest of the economy burns. However, on the other side of the coin I suppose that the deal can be considered a neat political solution on the back of some deft footwork by lawmakers. Despite the raft of economic fears reasoned for the sharp marking down of equity markets across the globe I suspect that as there is no other solution on offer markets will soon buy into the US debt plan solution for a while. Even so, wise heads and sceptics will remain seeing this so called solution merely as a notional token of wider debt and deficit issues that still lie ahead.

Despite the vast amounts of negative news we are forced to read such as the announcement yesterday that worldwide HSBC plans to axe 30,000 jobs in mature areas over the next two years (little mention in the media yesterday that HSBC also plans to create 15,000 jobs in growth areas such as Asia and Latin America) or the sharp though apparently less than anticipated fall in profits at Barclays Bank announced earlier today, despite the increasing push by the UK Coalition government to reduce public sector spending and jobs, despite the quite natural fear in markets that the effect of all the frenetic activity by government is now starting to impact on corporate sector profits the world still goes on. When in negative mind it is all too easy to forget that vast amounts of business are still being done, millions and millions of people are still being employed doing exactly what they are supposed to be doing helping their companies survive and grow. Inflation may be a problem just as falling asset values are too but as we have been down this road before we know what we must do. It is of course true that the financial world and particularly banking world is suffering the consequence of a big change in global economics and how banking and financial business is done – a fact that right across Europe can hardly helped for banks by constant cries from over-zealous ill-informed EU politicians calling for even more regulation that will hit them where it most hurts. Are these guys mad?

But while the streets of the ‘City of London’ may no longer be paved with Gordon Brown’s false or missing gold the situation probably isn’t quite as bad as it is so often made out. Indeed, worth noting that over the past two years while very many jobs in the financial and banking world have been lost very many more have been created. Indeed for me personally as I look back at the various so-called ‘crisis’ during the late 1980’s or through the 1990’s whilst it is true that there were big headline job losses at banks, brokers and financial market companies when things got tough for the most part within a year investment banks were soon back hiring.

I suppose that my point today is that the word recession is both abused and often over used. True, many hundreds of thousands of people across mature western based markets and where their governments have failed to heed the lesson of living within their means have been forced out of work. More jobs will be lost and when it comes to reporting of what little economic growth there is to be found few countries across Europe apart from Germany have much to shout about. Thankfully Britain is foremost amongst the crop of struggling nations attempting to come to terms with a new world order that is no longer tolerant of government deficits and national debt. But for all the public sector cost cutting effort, for all the pain now being endured and whether or not the IMF report which also says that families in Britain would have £35bn less disposable income over the next few years due to high taxes and benefit cuts somehow we have avoided moving back into recession. True, growth last quarter may have only been 0.2% and that figure may yet need to be adjusted downward but what we are experiencing now in terms of pain is nothing compared to the real fear and pain suffered during the 1970’s.

To suggest ‘recession….what recession’ may be a somewhat tongue in cheek remark as we look at the vast amounts of public sector devastation going on around us in Britain but when I look at the various weakened economies and sovereign debt problems manifest in Portugal, Ireland, Greece, Spain and Italy perhaps we should count ourselves fortunate. And despite everything no matter who owns them there really is good news to report on British based manufacturing operations too. Take BMW in Germany which owns Rolls-Royce Motors and Mini in Britain and which today reported a 66% gain in second quarter profits citing very strong demand worldwide in both these brands plus the traditional BMW brand too. There are plenty of other wholly British based corporates doing well too such as Rolls-Royce, BAE Systems, GKN, Cobham, and Meggitt and so on. Germany is the star right now true enough particularly looking at BMW and also the dramatic turn round in Porsche profits – up 37% at the operating level on the back of strong sales in the US and fast growing sales in China but don’t forget that some parts of Britain are also doing well. There is a another world out there and despite too much of the news flow that we rely on looking bad plenty of companies both at home and abroad are still doing well.

Howard Wheeldon is the Senior Strategist at BGC Partners