Thursday, April 16, 2009

Cynical tactic or horrific truth?

I am very suspicious about the stories appearing in today's press about next week's budget. According to the FT and the Guardian:

  • Public sector borrowing in 2009-10 will reach £175 billion, with a similar level of borrowing in 2011.

  • Next year's fiscal deficit will hit 12 percent of GDP.

  • Government expenditure will reach 48 percent of GDP by 2011.

    I suspect that this is part of a media management strategy. The Treasury has leaked these excessively pessimistic numbers, thus giving Darling the opportunity to present somewhat lower and more respectable numbers during his budget speech. This will then allow him to pose as a prudent guardian of the national purse.

    Actually, I prefer this cynical tactic to the horrific prospect that these numbers might actually represents the basis for this year's budget.

    1. It is no cynical tactic. The numbers will be bad; very bad.

    2. Sebastian WeetabixApril 16, 2009 at 8:58 AM

      I suspect these numbers will prove to be optimistic underestimates.