The economy is healthier now than it has been in decades and most people believe it will continue to improve. Polls show more Britons feel the economy will continue on the up compared with those who think things will get worse. Conservative Party claims about economic improvement are genuine. Britain is now attracting more foreign investment than any other European country. Consumers are confident and the economy is seen as as outperforming all within the European Union in terms of growth in gross domestic product. Most significantly unemployment, at 7.5 per cent, is lower than all EU states except the Netherlands, and falling. House prices are rising again, in parts of the Southeast by 10 per cent a year. Inflation is still kicking around two per cent with no real indicators of it growing. Chancellor Kenneth Clarke is wisely making much of his caution. The recent strong growth in living standards and worries that it may trigger off real inflation again mean there is a growing clamour for fiscal and monetary tightening rather than loosening. The recent 'Green Budget', produced jointly by the Institute of Fiscal Studies and Goldman Sachs, is positive about the long-term outlook for public borrowing, but it warns against sizeable tax cuts, believing existing public spending is now very tight, involving the prospects of lower rates of growth than have been achieved in the past. Mr Clarke warned at last week's Tory conference that the priority was to keep borrowing down and ensure tight control of spending. His aim is to get public or state spending below 40 per cent, which would be very low in European terms. He has been very cautious about any public statements on tax cuts he may announce in his November budget, although wise money has it that it may amount to slicing GBP3 million (HK$36.5 million) off the GBP269 billion public spending bill for the coming year.