This is a quickie just an initial reaction on Alistair Darling's budget, I'll go into more depth later when I have time.
During his speech earlier he said boldly this is a budget to 'offer hope for the future'. Whoops. Sorry Alistair if you are going to nick phrases from Barack Obama I'd expect you to at least give us realistic hope of what can be achieved. You're not promised to but a man on Mars before the next decade is out but lets get real.
The Times this morning said that you may say that recovery in 2010 might get as high as 1%, despite the average city view being 0.3%. Darling 1.25% is plainly laughable. Nobody is expecting it. Just think what will happen in May next year when everyone realises just how laughable as they go to the ballot box. But worse you are expecting it to get to 3.5% in 2011, which is optimistic even if we weren't still recovering.
But to also say that the recovery will have started before the year is out. Of course this is to cover the fact that we are the only Western economy who has put all our economic stimulus into the 2009 basket instead of spreading it over 2009 and 2010.
As a result we come to the the level of borrowing you expect over the coming years. OK bravely you announced that 2009 you expect £5bn more that anticipated for 2009 at £175bn. But then £173bn, £140bn, £118bn and £97bn over the next 4 years. With PSBR at almost 12% this year it would need you to recoup over 50% of all the recovery you envision to get that borrowing down that fast.
Don't know who did the maths but the figures don't add up.