The rules are quite clear:
From Law 12 Fouls and Misconduct.
Handling the ball involves a deliberate act of a player making contact with the ball with the hand or arm.
The following must be considered:
- the movement of the hand towards the ball (not the ball towards the hand)
- the distance between the opponent and the ball (unexpected ball)
- the position of the hand does not necessarily mean that there is an offence
- touching the ball with an object held in the hand (clothing, shinguard, etc.) is an offence
- hitting the ball with a thrown object (boot, shinguard, etc.) is an offence
The goalkeeper has the same restrictions on handling the ball as any other player outside the penalty area. Inside their penalty area, the goalkeeper cannot be guilty of a handling offence incurring a direct free kick or any related sanction but can be guilty of handling offences that incur an indirect free kick.
The first three bullet points are the only ones applicable in this instance.
Did the hand move towards the ball - Yes, there's no doubt about it
The distance between the opponent and the ball (unexpected ball) - the distance was not great, which is the reason most people think the decision is harsh, but could anyone seriously claim that it was an unexpected ball?
The position of the hand does not necessarily mean that there is an offence - I would take that to cover instances where the player is taking action to prevent the ball hitting him in the face or in the gonads - in this instance the player clearly moves his arm to a position adjacent to his thigh and towards the ball.
I cant see any other decision other than penalty.
If that decision had happened against us (that's Forest not England) people would be up in arms if a penalty had not been awarded; and quite rightly in my view.