I’m embedded at the IFS/Morgan Stanley Green Budget event – at which the two organisations present their own prognoses for the UK economy and public finances – and my head’s swimming with numbers, forecasts and graphs. Two things are standing out, though: just how much uncertainty there is about where we’re headed, and how restricted future governments are going to be because of Brown’s stewardship of the public finances.
First, the uncertainty. As Morgan Stanley’s David Miles put it, there is “an unusally large amount of uncertainty about the UK economy” right now. Even the experts just don’t know what’s coming next, and they’re having to come up with numerous “pessimistic”, “optimistic” and “central” forecasts to account for this. It’s striking that even the central forecasts are generally more pessimistic than the Treasury’s forecasts – although, to be honest, not by all that much – meaning that tax receipts will most likely be lower, borrowing higher, and the recovery slower than HMT expects.
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