<b><b>Economic growth in 2003 will be heavily dependent on the housing market, so a downturn in house prices would have knock-on effects right through the economy</b></b><br><b>The UK economy is like a four-cylinder car. The four cylinders are household spending, government spending, investment and exports. (I have ignored imports to keep the analogy simple.) To move along smoothly, all four cylinders need to be firing. But for the past two years we have been driving on only two - household and government spending.</b><br> Household spending, which accounts for two-thirds of gross domestic product (GDP), has remained buoyant throughout the past six years (figure 1). Government spending growth accelerated sharply during 2001. At just under one fifth of GDP, it has had a significant impact on economic growth. Whereas total workforce jobs in the UK increased by 25,000 in the 12 months to September last year, jobs in public administration, education and health expanded by 142,000. Figure 2 reveals the very different fortunes of investment and exports. Both collapsed during 2001. In the first three quarters of 2002, investment was down 5% on the same period a year earlier.<p></p><p><b><b>slow to re-balance</b></b><br> Economic forecasters take a more pessimistic view of the economy&amp;’s ability …