Fraser Nelson Fraser Nelson

Deficits to come

Michael Saunders, chief economist at Citi, is, for my money, the best analyst out there. We use his stuff regularly at Coffee House. If you have the nerve (and if you’re not on Osborne’s Treasury Team, who would find what follows sickening), click after the jump for his graphs on projected deficits. As he says:

“The Chancellor appears to have opted for vague plans for medium-term tightening, hoping that the gesture of eventual fiscal restraint will avert a fiscal crisis and avoid the political crisis that Labour would face from serious measures to address the UK’s fiscal weakness. But, in practice, these forecasts probably will convince few (if any) outside the Treasury.”

Here is how the budgets look – compared to the 2008 Budget forecast, what Darling says now and what Citi expects:

And in an historical perspective:

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