Darling to admit recession deeper; forecasts out of kilter
Alistair Darling will admit in next month’s pre-Budget report that the recession has been much deeper than he forecast in March.
“The chancellor is expected to say that the economy contracted by 4.75 per cent in 2009, shrinking at least one percentage point more than forecast in the Budget. But he will also say that the UK has at last turned a corner and is on the road to recovery, ahead of a probable general election in May,” the The Financial Times reported. The Telegraph also reported that Darling is poised to cut growth forecasts to lowest post-war level. “Alistair Darling will use PBR next month to slash his economic output forecast this year to the lowest level in post-war history.
The Telegraph commented: “The downgrade will be an embarrassment to the Chancellor, who is also likely to have to increase his borrowing projection marginally, since tax revenues have disappointed expectations this year.”
The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more