Were growth to be strong in the eurozone, there’d be confusion all round: politicians would be uncorking the champagne while the high priesthood that is the European Central Bank would be trying to ram the corks back in, meanwhile telling everyone to put their hair shirts back on.In the UK, though, decisions have to be made now, not later: there is no room for a hypothetical discussion or scenario analysis. The concept of growth being too strong in Japan is a strange one: having had virtually no growth over the past decade, no one is planning to bring the latest economic expansion to an end prematurely. I’ve been quite sceptical about the US recovery to date, but I have to admit that things look firmer today than they did a month or so ago. On top of the job gains, retail sales are booming again and the latest inflation figures might suggest that pricing power is returning.Of course, one month of stronger data provides no guarantee of lasting economic health. Inflation is higher partly because of higher oil and other commodity prices, which could point to a squeeze on profits later in the year, hardly the stuff of healthy economic recovery The eurozone still looks totally miserable.

Last year, the UK economy was still vulnerable to weakness elsewhere in the world. That threat now seems to be lifting.
Given all this more positive news, it is hardly surprising that markets sense the winds of change. Bond yields have risen rapidly in recent weeks, driven higher by upside surprises on US economic data. If the markets are to be believed, the last few weeks have seen a sizeable shift in the challenges facing policy-makers Last year, the US couldn’t generate jobs It’s doing so now Last year, Japan struggled to show a sustainable recovery The signs are a lot better today. The crisis over the reserves of oil giant Shell claimed its third scalp today with the departure of finance chief Judy Boynton. Staff at the group’s Swindon head office are braced for Ms Swann to announce up to 300 job cuts when she updates the City on Thursday about how she intends to rescue the struggling “legacy” retailer. Analysts have questioned WH Smith’s role in today’s crowded retail scene, arguing no one would seek to invent the company’s mix of business if it did not already exist..

New Look, Debenhams, Hamleys, Selfridges, Harvey Nichols and Arcadia have all been taken private in the past two years.Messrs Burke and Hammill both know WH Smith well: Mr Burke used to run its then subsidiary, Virgin Our Price, while Mr Hammill, who mounted an abortive bid for the group’s news distribution arm three years ago, was its finance director in the 1990s.Permira is thought to have lined up the French media conglomerate Lagard? to buy Hodder should it proceed with its bid.A successful offer would bring the curtain down on Kate Swann’s short reign as chief executive, with Mr Burke, who turned round the Hamleys toy shop group before selling it to Iceland’s Bauger last summer, expected to take her place. Mr Hammill would take a non-executive role, possibly that of chairman. Ms Swann, who used to run GUS’s Argos catalogue shopping chain, would receive a £475,000 payoff, plus shares worth more than £500,000 if made redundant. It is thought Permira would consider allowing shareholders to own up to 20 per cent of the delisted company.

Paul Smiddy, the retail analyst at Baird, yesterday described Permira’s approach as “an amazingly generous opening shot”.Permira, which will today write to WH Smith to provide further details of its offer, would only proceed with a bid if it gains access to the retailer’s books and obtains a recommendation from its board.In an attempt to win over any militant shareholders unhappy at the dwindling number of quoted retailers, the private equity house is prepared to offer investors the chance to retain a stake if it proceeds with a takeover. They have fallen by more than 28 per cent over the past six months, valuing the group at £630m. It warned: “As the approach is preliminary and there are a number of pre-conditions to the making of any offer, there can be no certainty that an offer for the company will be made.” Permira yesterday declined to comment.Shares in WH Smith, which climbed 8p to 260p on Friday, are expected to soar sharply this morning. But an RBS spokesman last week denied this was possible, saying the award could only be three times his salary.RBS has also been taken to employment tribunal by IT workers with fixed-term contracts who were barred from receiving a bonus paid to other staff for the successful integration of NatWest, which RBS bought in 2000. We do not think the targets in RBS’s long-term incentive plan are sufficiently challenging, given the level of awards, which are potentially excessive.”Pirc’s criticism comes after RBS, which is Britain’s second most profitable bank after HSBC, clocking up £6.2bn in profits in 2003, has already been forced to defend accusations of excess. In contrast, Mr Goodwin received a £1.7m bonus in 2002, which the bank said at the time reflected the successful integration of NatWest into the group after the 1999 takeover.Abbey National is also heading for a showdown with investors at its own AGM this Thursday after the National Association of Pension Funds criticised the bank for paying hefty bonuses to its bosses in advance of its recovery.The powerful NAPF questioned whether the payments were “appropriate prior to concrete evidence” of a successful transformation at Abbey, which lost £636m last year. It transpired only this month that the bank owns a private jet worth £17.5m for the use of Mr Goodwin and his board.