The city now predicts that Osborne will borrow far more than the OBR predicted Alistair Darling would have. It's time for a radical change.
We know from this morning’s unemployment figures that the government’s austerity programme is hurting – and it’s hurting the young and unemployed the most. But is it working?
David Cameron and Nick Clegg asserted in the Coalition Agreement (pdf) that tackling public sector debt was the government’s ‘most urgent task’. It has been revealed this morning that across the finance industry, the verdict is failure.
The Treasury has collated 14 independent forecasters’ predictions (pdf, p.18) for net government borrowing over the next four years.
Their collected view is that chancellor George Osborne will borrow billions more than the Office of Budget Responsibility predicted he would in June 2010 (pdf, Table C7, p.90) – or that the OBR said Alistair Darling (pdf, Table 4.5, p.38) would have if Labour had been re-elected.
Here are the raw figures:
At worst, the government’s swinging cuts have stopped the recovery in its tracks, leading to borrowing far above and beyond what they predicted their supposedly profligate rivals intended. At best, with the European and global economy facing such turmoil, the facts have significantly changed since the general election of May 2010.
The current strategy has failed. It’s time for serious change.
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• Fast spending cuts push economy from fastest quarterly growth for a decade towards zero – Cormac Hollingsworth, November 1st 2011
• Unprecedented growth of 1.3 per cent needed for OBR to meet its projection – Will Straw, October 31st 2011
• For every extra £4 spending is cut, it only cuts borrowing an extra 75p – Cormac Hollingsworth, October 18th 2011
• Growth cut the 2010-11 deficit as fast as cuts – Cormac Hollingsworth, September 22nd 2011
• Without growth will we even halve the deficit? – Cormac Hollingsworth, September 20th 2011