Osborne plays a tough hand well

Today was always going to be a difficult day for the Chancellor. The figures from the OBR were always going to dominate the headlines and the restrictions of coalition meant that there couldn’t be as much as the Tories would have liked on the supply side. It was striking that the loudest Tory cheer of Osborne’s statement came when he reiterated his opposition to an EU-imposed financial transactions tax.

But the silver lining for Osborne and co is that Labour still lack economic credibility. It is hard for Labour to savage Osborne for borrowing more than he said he would — which he is to the tune of £158 billion — and then say that they would borrow even more than that.

As Pete said earlier, the wild card in all this is the situation in the eurozone. If Balls, who has always been sceptical about the single currency, manages to get ahead of this crisis and start advocating solutions that the government cannot, then it might give Labour a way back into the debate.