LONDON BRIEFING/Chris Johns: The UK economy might be stabilising. If so, it means the recent slowdown might become one of the shortest in recent history.

But the evidence is mixed. Interpretation of that evidence is more art than science but the UK economy, I think, is picking up. That, of course, is a forecast, and the status of economic forecasters is deservedly below that of the weatherman.

Indeed, weather forecasters show more sense than many economists and refuse to guess about the weather further than five days out. It is easy to poke fun at economic forecasters, particularly when they display ignorance about the current, or even past, state of the economy, let alone its future.

Here in the UK, the government used to subsidise the efforts of mainstream forecasters in the hope of improving economic policy. For a while, the Treasury even flirted with the idea of privatising its model of the UK economy. It decided to keep its own forecasters, but cut off funds to the private sector groups. It was decided that forecasting was not worth spending much public sector money on.

Essentially, economic forecasting is about growth: how much and of what type. Growth is a slippery concept that most people think they understand but after a few moments of deeper contemplation it becomes clear we have broached a fiendishly complex subject. Why growth occurs at all is only imperfectly understood. Only one source of growth is obvious: expansion of the population. Demographic change is a hugely significant driver of economic performance. But what about other sources of growth?

There is almost a mystical aspect to how we think about, model and forecast growth. Growth is about taking a given quantity of labour, land and capital and producing an ever greater amount from those rigidly fixed inputs.

At one level, growth isn't so mysterious. Simple efficiency gains - the elimination of waste - can lead to higher output. But we can only play this game for so long. Ultimately, productivity growth is the driver of economic growth. This seemingly arcane concept is the most important driver of, well, pretty much everything. How fast our economies grow and how wealthy we are as individuals are determined by productivity growth.

The only reason the UK's economic performance has only been "mid-table" when compared with other countries is that productivity growth has been relatively average, even mediocre. Gordon Brown understands this, which is why he goes on and on about policies to improve productivity growth. Unfortunately, those policies are not working, at least not yet.

There is much that we don't understand about the determinants of productivity growth, hence policy-making is hit and miss. As is forecasting.

All of this is to explain, first, why economics is so hard and, second, why it is nevertheless so important. And we ignore serious analysis at our peril.

The perfect illustration of this came last week with the government's publication of the economic analysis of why four out of the five euro tests had been failed. A week is sufficient to give us a lot more perspective than the instant punditry that accompanied the Chancellor's announcement. The economic analysis produced by the Government was emphatically not "gobbledygook", as described by several British commentators. It might have been naive to expect the British (generally tabloid) media's ever increasing hatred of all things European to allow a sober assessment. But the focus on the soap opera battle between the Chancellor and the Prime Minister meant a lot of good stuff was missed.

We now know, with as much certainty that can be mustered about these things, that Britain will join the euro. We know how that decision will be announced and we know the exchange rate at which sterling will be abolished. Amidst all the sound and fury little has been made of these rather substantive conclusions.

The events of the past week provide the case study in political economy. Brown and Blair explained, patiently and painstakingly, that the euro question was exclusively political, but one with economic consequences. The five tests are there solely to determine the timing of entry. We will get a better idea about that when the next economic review is announced. That will only come when the five tests have been passed. There will be no more economic analysis that concludes "not yet".