People & Business: Crying wolf

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MORGAN STANLEY Dean Witter's latest note on UK economics and strategy is headlined "Crash Landing Was False Alarm".

The title does not just refer to the CBI's April Industrial Trends survey, which shows a sharp recovery in UK manufacturer's optimism. It also reflects the experience a week ago of Kevin Gardiner, head of the economics team at Morgan Stanley. For Mr Gardiner was on the BA flight from San Francisco to London which announced that it was "about to make an emergency landing on water."

Mr Gardiner recalls: "I do remember ... noticing we were still over land. But I had to take the announcement at face value. My heart beat went from very slow to very fast."

Happily the pre-recorded message was revealed as a mistake 30 seconds later. Mr Gardiner thinks there is a link here with the way the CBI "cried wolf" about the British economy last year, only for its latest survey to show the sharpest rebound in its 30 year history.

Its a smooth ride from now on for UK equities, according to the Morgan Stanley team.