COMPARED with the disasters of previous years, 2013 was great. The British economy picked up, racing to a 3.6% annualised growth rate in the third quarter. A strong Christmas could mean the fourth is just as good. All 38 forecasters recently surveyed by the Treasury thought that 2014 will be better than 2013. Strangely, though, agreement ends there. Of those surveyed Citi, a bank, was most optimistic: it predicted British GDP will rise by 3.2% in 2014. NIESR, a think-tank, is towards the bottom of the scale, betting on 2% growth. This seemingly slim difference is profound. Stripping away temporary ups and downs, Britain's economy could be expected to expand by about 2% a year as the labour force grows and people in work get better at doing things. If GDP grows more quickly, the economy will need more fuel, so unemployment will tend to fall. If GDP grows more slowly, unemployment tends to rise. Citi, which predicts GDP growth above trend, thinks unemployment will fall to 7% in late 2014. At that point the Bank of England's self-imposed handcuffs - a promise to not raise its interest rate until unemployment is below 7% - will be off. By contrast, NIESR's forecast puts growth roughly at its trend rate. That suggests unemployment will remain above 7% until 2016. A rate rise would be years off. Two markets will nudge the British economy in one direction or the other. The first is the market for government debt. In a benign scenario, bond yields will stay low. Since government borrowing costs are a floor to the rates firms pay, companies will be able to get hold of new cash cheaply. Investment could pick up: Citi thinks it will rise 11% in 2014. The Bank of England has tried hard to lower bond yields, which it cannot control directly. It has bought government bonds with newly printed money to push their prices up and yields down, and tried to influence expectations with "forward guidance" about where its rate might go. Yet the biggest influence on British bond yields in 2013 was not what happened in Threadneedle Street but what happened in Washington, DC. Britain's government debt market follows America's slavishly (see chart 1). If the Federal Reserve raises its interest rates, or markets expect it to do so, yields on American bonds could go up, followed by British ones. That would slow the recovery. Even NIESR's more modest projection for investment - up 6.6% in 2014 - could prove too optimistic. And the knock-on effect on household consumption would be huge. Higher bond-market rates mean mortgages and credit cards would become more costly. As debt repayments consume more disposable income, shopping would slow. The other market to watch is foreign exchange. The strengthening economy and growing expectations of future rate rises made British assets seem more attractive in 2013, both as a safe haven and for those hungry for dividends. As foreign currency flooded in to buy assets priced in pounds, the demand for sterling rose and it started to appreciate. If this continues, British exports will suffer and the country's already weak balance of trade could deteriorate (see chart 2). But if sterling stays cheap it could be a good year, especially since Britain's most important export destination, America, is on the up. These market worries mean another big year for the Bank of England. Despite the return to growth its rate-setters had a frustrating 2013. Not only did the bank's forward guidance have little impact on bond yields, many on its rate-setting committee thought sterling too pricey in mid-2013 and expected it to fall, not rise. If an interest-rate rise looms, impotence will turn into outright unpopularity.