THE question everybody seems to be asking themselves these days is whether the strong recovery experienced by the UK market is sustainable. Are we currently witnessing a V-shaped recovery, or will a further decline result in a W-shaped bottom to the market?

For every market commentary that suggests the recession is coming to an end, there is a gloomier point of view that recent stock market strength is based on false hope. The argument against a sustained recovery relates to what effect the end to quantitative easing will have, and the expectation that unemployment may still rise to three million.

The argument for a sustainable recovery relates to the fact that house prices seem to have stabilised, and in some cases are beginning to rise, while only last week the Office for National Statistics stated that the unemployment figures fell between July and August, indicating that the economy may be beginning to turn a corner.

Reports that banks are once again achieving strong profits, with the prospect of large bonuses to be paid at the end of the year, indicates that UK and US economies are well on their way to leaving the past two years firmly behind them. For many US banks, this includes the repayment of emergency loans provided by the Federal Reserve Bank.

Within the UK, while banks may be seeing an improvement in trading, the Government is still a long way from implementing an exit strategy from either the part-owned Lloyds Banking Group and Royal Bank of Scotland, or the fully nationalised Northern Rock.

As both Lloyds and Royal Bank are currently in the process of considering a further capital raising exercise, the UK Government is likely to end up receiving a further cash call, in order to maintain their stakes in the company.

Although the Government has indicated its intention to take up any additional shares offered by Lloyds Banking Group it has, at the same time, refused to underwrite what could be a mammoth £15bn exercise.

This would have meant that any shares not taken up by existing shareholders would have been bought up by the Government, thereby increasing its existing stake in the company.

Although bank workers may be looking forward to a return to bonuses, public sector workers are likely to see their pay frozen, as the Government attempts to reduce the debt mountain built up over the past few years. Both Labour and the Conservatives have outlined plans on how they intend to cut public spending. As many private sector workers know, this unpopular and tough stance is likely to result in staff walkouts or strikes.

What effect this will have is yet to be seen, although we are soon to witness how a postal strike in the run-up to Christmas will affect this still fragile economy. In a rather unsurprising move, Royal Mail workers have recently voted to strike in protest against the need to modernise and streamline this ageing business.

Whether this will result in a reversal of a trend that has seen online Christmas shopping expand exponentially over recent years remains to be seen.

Small internet businesses which rely on the ability to post goods to their customers could be in for a troubling time. With just over two months left until Christmas, I suggest starting your shopping a little earlier this year.

■ Michael Rankin is an assistant director in the Teesside office of Brewin Dolphin, and can be contacted on 0845-213-1340. All prices quoted in the article are from public sources. The views expressed are not necessarily held throughout the Brewin Dolphin Group. You should bear in mind that no investment is suitable for all circumstances and it is important to seek expert advice if in any doubt.

Brewin Dolphin Limited is a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority.