The world economy faces considerable challenges. Despite this, I expect global growth to pick up this year, to its strongest pace since 2010. The mood in the markets is positive. With interest rates set to remain low in the United States and Britain, on the Continent and in Japan, and with bloated central bank balance sheets, there is ample liquidity looking for a home in which to invest. The trouble is, in recent years this positive sentiment has not lasted.

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The mood was pessimistic at the annual meeting of the International Monetary Fund in October. Then, the fear was that China would have a hard landing and the US would go over the fiscal cliff. I didn't share that view and the trend of events since helps to explain the present positive market mood.

In many respects, the key issues impacting the world economy have not changed since the crisis began. The big positive is the emergence of China as an economic power - its economy accelerated at the end of last year - and this is spearheading growth across emerging regions. As such, the world economy continues to grow.

The other big impact is too much debt and too little demand in many Western economies. The good news is that signs from housing, jobs and lending suggest that the US economy is improving. Also, manufacturing there is receiving a competitive boost from cheap shale gas and rising wages in China. The headwind, though, is the hit to demand from a tougher fiscal policy. This suggests a steady, not spectacular, recovery, but it is moving in the right direction.

What does this mean for Britain? An improving world economy should help our exports, but we cannot take it for granted and thus must ensure that we boost demand at home. This year will still be tough for the UK. Public sector jobs will be shed. Despite the welcome cut in corporation tax, many small firms are more concerned about rising business rates and do not want to borrow because of restrictive lending terms from banks and sluggish demand.

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Finally, a more positive message is needed. You can't force people and companies to spend unless they want to. Talk of austerity needs to be replaced by a vision for what will follow, in order to encourage those with the ability to spend and invest to have the confidence to do so.

David Fuller's view The best financial story over the last thirteen years, in my opinion, and one that I have referred to frequently, has been the improved corporate governance of many big capitalisation, multinational companies.

On seeing the global downturns in 2000 and 2008, particularly in the West, a significant number of these corporations cut overheads and focussed on improving their business plans. Consequently, most of them increased profits and passed along some of these results in the form of higher dividends.

Companies have benefited considerably from lower interest rates - an environment that is likely to persist for at least most of this year and possibly considerably longer. Share buyback programmes have helped to support equity prices, albeit in volatile conditions due to global economic problems. Corporations are among the main beneficiaries of the accelerating secular trend of technological innovation.