Bagehot, The Economist’s political columnist, has started a blog which promises to be well worth reading. In one of his early entries, Bagehot wonders about the effect of the recession on non-economic areas of policy and life. It seems almost inevitable that the lack of money and the mounting public debt are going to lead to a restructuring of the way public services are provided.
The head of the Audit Commission warned on the Today programme this morning, that there are going to have to be “very substantial expenditure cuts” once the economy begins to recover. He said that these cuts would have to be “substantially” larger than £30 billion. Interestingly, he also said that he did not expect the economic recovery to start until mid 2010. Brown and Darling’s prediction in the PBR that the economy would start to grow again in the third quarter of this year, seems more and more absurd as that date approaches.
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