The Prime Minister’s Spokesman has just given the lobby a briefing – and repeating what Darling briefed the Cabinet. I hope Chancellor started his presentation with the words “once upon a time” because what followed was demonstrable fiction. Here are the main points:-
1) All the countries in the world are facing problems
2) Britain is well-placed to withstand these problems.
3) Inflation is low
4) Debt is low, by historical and international standards are low
5) Economic growth is resilient.
My response:
1) There is a global credit crunch, but Britain will be amongst the worst hit by it (see point 5)
2) We would be well-placed had a surplus been built up over the fat years. Instead these is a huge deficit. So we’re at the mercy of global economic problems.
3) As for the inflation con, does anyone paying any bills believe it? See the Brownie I did the other week.
4) Amongst the developed world, only Japan and Hungary have worst deficits (see Table 27, OECD)
5) Growth is not resilient. It is due to halve from 3.1% last year to 1.7% this year (the latter figure is from the Treasury’s consensus of independent forecasts). No other country in the developed world has a slowdown of this magnitude.
So let’s wait to see if Darling will repeat this – and what success he’ll have of being taken at face value…
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