fall in UK exports to our main trading partner? -- The EU has also re-entered recession, and has poor prospects of recovery given their current fiscal and monetary policies. Will the government commit to further austerity and job cuts in the public sector or will it change policy and be willing to finance substantial sums in public sector infrastructure? There is likely to be a fudge with small scale investment, and overall small reductions in public spending as they stick with their deficit reduction plans. Supply Side Miracle? Rather belatedly the government have become more concerned with economic growth. However, rather than tackle the issue of aggregate demand, they are pinning their hopes on supply side reforms -- Tax cuts to boost incentives. Reducing planning restrictions to encourage people to build conservatories. However, governments often over-estimate the potential of minor supply side policies to overcome a fundamental lack of aggregate demand. (see role of supply side policies in recession ) Housing Market. Further falls in house prices would weaken consumer wealth and lead to lower spending. Consumer confidence. After reaching an all time low, how will this recover? Government Debt / Deficit The Euro debt crisis has focused attention on the UK's rapid growth in debt since 2008. The government responded by saying that deficit reduction was the highest economic priority. However, even relatively mild austerity policies contributed to a double dip recession. This second recession meant tax revenues have been less than expected and the government is in danger