Brown’s green shoots

At PMQs today, Brown droned on about spending his way out of recession, trying to justify his incontinent spending with claims that inflation isn’t a worry.

Yet.

Meanwhile, Mervyn King, Governor of the BoE bore witness at the Treasury Select Committee hearing:

“The speed of which the fiscal stimulus should be withdrawn has to depend on the state of the economy. …The scale of the deficit is truly extraordinary. 12.5 percent of GDP is not something that anybody would have anticipated even a year or two ago. And this reflects the scale of the global downturn.

But it also reflects the fact that we came into this crisis with fiscal policy itself on a path that wasn’t itself sustainable and a correction was needed.

There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down if the economy recovers to reach levels of deficits below those which were shown in the budget figures.”

… which blasts a hole right through McMental’s cunning plan to flood the country with money we can’t afford. Clearly, King knows that the UK’s fiscal woes are home grown. Let’s see how Gordon wriggles on this particular hook. King predicted that the second-quarter’s growth will be negative and that we might not return to zero growth until the new year. He said we can’t wait for the next parliament before spelling out how the budget deficit will be reduced.

Richard Lambert, Director General of the CBI and former member of the BoE’s MPC, said that the treasury’s current plans are not sustainable and we need plans to get the economy back in balance.

Even “figures close to Gordon Brown” said that the Labour spending / Tory cuts gambit is unsustainable and an inadequate platform on which to fight the next election.

Sneery Paxo on Newsnight last night alluded to friction between No. 10 and No. 11 and that King supported Darling’s stance. King defended Darling robustly on the TSC, so it would seem that Brown is out-flanked.

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