Spurred on by fear of doom and bust, a leaner corporate Britain has moved quickly to cut costs and is fit enough to ride out the crisis

In January 2008, I predicted in Director that the sub-prime lending crisis risked escalating into a "trillion-dollar-plus banking debt exposure and a strong negative impact on corporate liquidity". The property market, I added, could tumble if confidence fell. Don't you just hate being right?
Fast-forward a year and we're reeling from a whirlwind in financial markets that caused a collapse in house values and a drought in liquidity. What's more, unemployment is soaring. The question for those of us creating wealth in the "real economy" is how to plan in the face of such uncertainty? There is cause for cautious optimism.

Much fear is levelled at the state of UK public finances, but government borrowing as a percentage of GDP is well below that of our competitors. This means we have the capacity to borrow and spend. We have already acted more decisively than we had 18 months into the ERM crisis. And as for fears about the government pulling forward its investment programme, it's worth remembering that when the consumer reins in sharply, it is time for the taxpayer to dip into his pocket.

Since 1992 our economy has grown by more than 50 per cent, compared with less than 30 per cent in the eurozone, and corporate Britain is in pretty good shape. Business owners I meet daily have ripped out hidden inefficiencies and offloaded marginal or under-utilised personnel. We ought to thank the media for scaring us witless and acting as a catalyst for firms to begin cutting costs, switching marketing spend to focus more on existing customers, and reducing stocks and working capital needs.
I predict that we'll follow the US out of recession at the end of this year and leave the rest of Europe in our wake.

Alex Pratt OBE is founder of www.seriousreaders.com