Differences in economic performance are widening between Europe, Asia and the United States, says the Organization for Economic Cooperation and Development (OECD). Brian Childs (International Herald Tribune) reports that Jean-Philippe Cotis, OECD chief economist, has recommended the European Central Bank should cut rates from 2 to 1.5%.

The recommendation came as the OECD cut its growth forecast for the economy of the 12-member euro region to 1.2 percent for this year, down from a forecast of 1.9 percent in December. The OECD said that it expected growth of no more than 2 percent in 2006.

This compares with US growth forecast at 3.3% and China's at 9%. Their estimate for the UK was revised down to 2.4% (the Chancellor's figure is 3.5%). Gary Duncan (Times) quotes Capital Economics predicting that when taxes increase to meet the shortfall, UK growth will be hit even more.

Capital’s analysis warns that "payback time" has arrived after the Government's spending drive and heavy borrowing. "It looks very likely that taxes will rise in the next year or two," it says, arguing that the resulting period of tighter fiscal policy could knock a full percentage point off the economy's annual pace of growth.

It doesn't have to be like this. If the Eurozone economies will start to free up their labour markets, lower the costs of setting up business, and cut taxes, their growth rates would probably head skywards. Similarly, if the UK Chancellor would stop spending other people's money on his public sector, the UK figures would shoot up. The trouble is that if you rob Peter to pay Paul, you'll get Paul's vote. And if he outnumbers Peter, you'll get elected. But it should surprise no-one if Peter decides to quit work or to emigrate. The world owes no-one a comfortable living for nothing, however big their majority.