The central deceit behind Budget 2009 – Alistair Darling’s trampoline recovery theory – is steadily crumbling. CoffeeHousers will remember the scam. He pretends that Britain will, from April 2011, enjoy three years of turbo-charged growth averaging 3.5 per cent a year, hence justifying his pre-election splurge. It was, in my view, an extraordinary moment – where the Treasury didn’t even pretend to be operating within the parameters of the possible.
I quizzed the Treasury official about it in the post-Budget briefing (full transcript here), saying there is not a single analyst, anywhere, who shares these forecasts. “No one agrees with you” I said. “Well I don’t actually know of any of what you are talking about” he replied. And he claimed earlier “there aren’t that many people that produce five year independent forecasts.”
Well there are about 22 of them, actually. And last week HM Treasury put out a list of them. I present the average of these independent forecasts below, next to the Treasury’s’ forecast of last month. It’s worth putting on the record, because each one of these downgrades will significantly increase the amount the Tories have to borrow or cut. The options facing George Osborne grow uglier by the day.
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