Booze prices are already starting to rise and the cycle of cheap drinks and a rising tide of

Booze prices are already starting to rise and the cycle of cheap drinks and a rising tide of violence is slowly, gradually, being broken. It will take time but it will be a lasting adjustment.Mediation is better than litigationThere is one footnote worth adding to the sorry saga of Equitable Life, the once proud savings institution that abandoned a £700m compensation claim against its auditor Ernst & Young (E&Y) on Thursday. As has been widely pointed out, the only winners out of Equitable's decision to pursue E&Y through the courts were the lawyers representing both sides who took home about £50m in fees.The Equitable case against E&Y probably highlights better than any other recent case the general folly of trying to pursue your enemies through the courts.It's not just the costs involved that ought to put people off. As a cure for the problem it has its attractions and should be taken up by the police.A more lasting solution probably lies in the deteriorating economics of the high street.

Here, the pubs are undoubtedly finding life is getting tougher, just like other retailers. Price cutting is no longer an answer as trading statements show that plenty of people are avoiding town centres. To get a decent return, the financial backers have expected decent sales growth. The ugly side of that dash for growth has been the cheap price of booze that has fuelled our current binge drinking epidemic.Now, Enterprise owns friendly local boozers. But its chief executive, Ted Tuppen, reckons problem pubs wherever they are should be closed down and quickly. Mr Brown will blame the oil price for the UK's economic woes But this is poppycock. Sure, the oil price doesn't help but it will simply further damage an economic system already exposed by too much personal and public sector debt.The damage to Mr Brown's political credibility over his climbdown on growth rates is significant, but sadly for the rest of us the damage to the economy will be much greater.

Labour's poor record on rising levels of taxation, for higher income groups in particular, is about to get worse.Higher prices will curb binge drinkingEnterprise Inns is Britain's biggest pub company. Having floated 10 years ago with a value of £50m, it is now worth £3bn - that's a lot of extra pints.It is the product of a piece of Conservative Party legislation known as the Beer Orders, which, 15 years ago, forced the big national brewers to break up their tied estates. Huge amounts of capital have subsequently been sucked into the pubs sector to back independent pub companies such as Enterprise. Six months ago, the pair shared a platform shortly after the IMF had cut its UK growth forecast to 2.6 per cent. Mr Brown said Mr Rato's staff had got their figures wrong in the past and were wrong again.

This week the IMF cut again to 1.9 per cent, but this time Mr Brown has been forced to follow suit Humiliation rarely comes as complete as that. Mr Brown's political enemies, in all three major parties, will be clapping their hands with glee For them, the emperor has been exposed at last. The naked truth of Britain's real economic malaise has been laid bare, and with it the appearance of Mr Brown's political invincibility.Revenge will be sweetest, however, for Rodrigo Rato, the managing director of the IMF who has long suffered Mr Brown's haughty put-downs. Cutting it, to about 2-2.5 per cent, will immediately raise the very real prospect of either big cuts in public spending, to the tune of £10bn a year, or an increase in tax equivalent to 3p on the basic rate of income tax. Thank goodness the election was in May, Tony Blair will no doubt be thinking as he peruses this morning's headlines.If Mr Brown himself admits the economy isn't going to grow at anything like the rate he has been insisting on for more than two years, then all those terrible predictions and calculations of fiscal black holes are about to come true. Indeed, when it comes to forecasting, no one gets it right like Mr Brown, according to the Treasury.The growth rate is the assumption on which all Mr Brown's most important economic policies are based. Mr Brown and his Treasury spin doctors have started to pave the way for a deeply embarrassing admission that his expected 3 to 3.5 per cent growth rate for the UK economy is wrong.

It is going to have to be reduced, and reduced a lot, judging by the noises coming out of Washington. Mr Brown's admission is the political equivalent of a very large corporate profits warning. The warning is all the more shocking because it comes from a Treasury management team, led by Mr Brown, that for the past eight years has slapped down anyone brave enough to question its governance of the economy with a battery of facts and figures about unprecedented economic stability and well-being. Treasury indicates it will use pre-Budget report to cut its forecast to below 2.5 per cent.. There is the strong whiff of humble pie coming from the Chancellor's flat in Downing Street this morning. A very large slice indeed is being prepared for Gordon Brown ready for his arrival from Washington, where he has been attending a meeting of the International Monetary Fund. This includes boosting production, greater openness among Opec countries and a proposed $20bn (£11bn) fund to help poorer countries build alternative energy supplies.Growing painsNovember 2002: Treasury forecasts growth for 2005 between 2.75 per cent and 3.25 per cent.March 2003: Budget document raises forecast to between 3 per cent and 3.5 per cent.April 2005: IMF cuts its growth forecast to 2.6 per cent from 2.9 per cent.April 2005: Chancellor criticises IMF forecast as "plain wrong", saying it be forced to revise it up.September 2005: IMF cuts forecasts again to 1.9 per cent. The only winners would be BP and Shell, whose high profits would prop up sterling - making life even worse for exporters.Mr Brown said he was using this weekend's G7 meetings to push for his five-point plan to bring long-term stability to world oil prices.