People knew that a big change was taking place but they could not see how far it would go. What I think can be said with some assurance is that inflation is unlikely to be a serious problem for the foreseeable future and a period of benign deflation is quite possible.Benign deflation? Is that not a contradiction in terms? Well, it is quite possible to envisage a long period of very gradually falling overall price levels, with some prices falling and others rising. The benefits of higher productivity would be received as much in lower prices as in higher wages. This would enable the whole community to obtain some of the rewards of higher productivity, not just the people who happened to be at work.Under those circumstances, companies that were successful would indeed be able to increase dividends and could expect to see their shares rise. Bonds would become again a more or less safe investment, where the risk was in the borrower not meeting its obligations, rather than there being a surge in inflation.

Borrowing would be cheap and there would be a greater level of global market and currency stability. That would mean that there would be clearer market signals and – hopefully – fewer investment errors. The nearest historical parallel would be the period between 1870 and 1914.But you don’t need to buy that whole thesis to support the notion that you should not “sell in May and go away”. Even if shares are only OK performers for the rest of this year, the fact that on a long view they will outperform bonds must be the dominating driver of any long-term investor. OK, you are allowed to sell this May if you feel like it – but come back to equities some time soon..

British Rail ran the rail network for about £2.5bn a year Under the privatised Railtrack, the cost was a little less. This past year, under the newly formed Network Rail, the cost will be more than £5bn and there it will stay in all probability for at least the next three years. The consequent increase in public subsidy has been equally dramatic. This year alone, approximately £3.7bn of taxpayers money will be invested in the railway, equivalent to the cost of the Iraqi war or 2p in the pound on the rate of income tax. The railway is presumably already a little safer than it was, but it would be hard to justify spending on this scale for safety purposes alone on any reasonable analysis of the benefits derived. Around 300 people a year are killed on the railways, but the vast majority are suicides, and no safety net is ever going to catch them. True enough, there has been a cluster of accidents, but there have also been much worse periods in the railway’s post-war history.

As far as saving lives is concerned, it would be infinitely more efficient to spend the money on hospitals.So what about standards of service? Not much sign of improvement there either, as anyone who uses the railway will know. The number of minutes delay attributable to Network Rail is on an improving trend, but at 14 million last year, it is still more than double the level of the pre-Hatfield Railtrack. The performance in April was similar to the same month last year, which was the worst ever.In the meantime, the numbers employed by Network Rail are strongly on the rise, up by about 25 per cent since Railtrack went into administration. I’m not saying that all this extra spending is a waste of money.