London Briefing: Gordon Brown's luck might be running out - at least his critics hope that is the case, writes Chris Johns.

As Tony Blair continues to defy those who want to see him stand down immediately (which is pretty much everybody in the country), Gordon's main claim to fame, the strength of the economy, is looking vulnerable.

Most commentary about the UK economy goes something like the following: "The best decision Gordon Brown ever made, perhaps his only good one, was to make the Bank of England independent back in 1997."

Brown's luck was to inherit a structurally sound economy - thanks to the efforts of the Tories over the previous 18 years - and his genius was to move the last remaining source of instability, namely the setting of interest rates, into sensible hands.

While the Bank of England has done an amazing job, so the argument goes, it either slipped up and encouraged - or could do nothing about - a consumer boom that was fuelled by a house price bubble.

Once that bubble popped, as it did 18 months or so ago, a consumer bust was inevitable and that is precisely what we are living through now. Every day seems to bring more news about the disaster that is British retailing, with household names like HMV and Boots unable to persuade consumers to come into their stores. Boots's mooted merger with Alliance UniChem is being described as mostly defensive in nature in the face of a structural downturn in retailing of all kinds.

The problem with this story is that hardly any of it is true. In a brilliant speech, Steve Nickell, a member of the Bank of England's monetary policy committee, recently argued that there was no house price bubble to begin with and that there has been no consumer crash.

Take the myth of the debt-fuelled consumer binge over the first few years of this century. Nickell points out that consumption growth over the years 2000-2003, the period when many people think the consumer ran out of control, spending actually rose at a rate almost exactly the same as it had for the previous 25 years.

Moreover, the proportion of income that was actually spent was relatively flat: if debt had been a big part of the equation, we would have expected to see a dramatic fall in this ratio.

While it is true that debt levels have risen, there has been so much else going on in the financial system that it is simplistic to attribute a non-existent consumer boom to rising debt.

It is tempting but quite wrong to conclude that rising debt must have gone into consumption. As debt has risen, so has the asset side of the balance sheet.

But if those assets are houses, as many of them are, and house prices are a bubble, then there is still plenty of trouble ahead, right? Dead wrong, according to Nickell.

He reckons that there are plenty of reasons why the "equilibrium" level of house prices has risen significantly. The removal of various constraints in the mortgage market is one factor. Another is the supply/demand balance in the housing market itself.

But the biggest driver of sustainable rises in real house prices is the fall in real, long-term interest rates. This is where the discussion gets quite esoteric, but suffice to say that UK house prices are very sensitive to movements in real bond yields - which have fallen a lot.

We might be tempted to conclude that a lot of this is special pleading from a central banker charged with presiding over a boom and bust in the housing market, but just suppose that Nickell is right.

One area he did not venture into was what all of his analysis means for the future of the UK economy. There is one big implication: the current slowdown is a mere cyclical blip and that means all of the hysterical headline writers have got it wrong. The economy should stabilise soon and something like trend growth should be expected for the medium term.

Which means, of course, that it would be quite wrong to argue that Gordon Brown's luck has run out? If, contrary to all expectations, the economy begins to show signs of life, his transition to 10 Downing Street will be nothing short of a coronation.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.