PM should say 'sorry, Darling'

The papers have been full of news about champagne rationing.

According to wine merchants Berry Bros & Rudd, demand for the best bottles of the stuff is so high that it may have to open waiting lists for them, particularly Magnums, Jeroboams and Methuselahs (which contain eight bottles' worth).

Why? Thanks to steady rises in demand from the West, plus the surge of enthusiasm for expensive drinks from the newly-rich consumers of India, China, and in particular Russia, overall demand is rising fast: up 11 million bottles to 333 million bottles in the 12 months to August. There just isn't enough to go around, say Berry Bros.

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I can't get myself too worried about this, partly because I'm quite partial to Prosecco, but mainly because, rather like the fact that I can't afford a house in Lancaster Gate, this is a problem the market is going to take away before it really upsets my plans.

Just look at the state of the world. The US Federal Reserve has cut its forecast for GDP growth next year back to 1.8% (which means that, at best, it will be growing a good 30% slower than Japan); stockmarkets across the globe have had a horrible week, falling a percent or two nearly every day; oil is back above $98 a barrel; and the fall out from the subprime crisis has clearly only just begun.

We are seeing the beginning of what my colleague Bill Bonner and the other great bears out there like to call the Great Unwind: the full-scale collapse of the credit bubble.

Here in the UK, we've got a couple of other problems too. Our banking system is fast falling into disrepute, thanks to Alistair Darling's Northern Rock nonsense. Our housing market is a mess (anyone who still thinks it is healthy should visit Propertysnake.co.uk to gauge the level of desperation among sellers, or just take a peak at Paragon's (PAG) share price). And the Treasury and the Bank of England are both forecasting slowdowns in economic growth.

Worst of all, just when we need them to be in good shape, it's becoming clear that our public finances are a complete mess. As Ian Campbell points out on Breakingviews, back in 2002 the overall budget surplus was 4% of GDP. Today, thanks to Gordon Brown's five-year spending binge, we have a budget deficit of 3% of GDP. In the first seven months of this year the Government borrowed £27.4bn up from £17.5bn in the same period last year.

So instead of being able to soften the blow of economic slowdown with a tax cut or two, or a well-judged rise in public spending, "the Government may be forced to exacerbate it by reining in spending or raising taxes". Still feel like champagne? Probably not. Brown should be ashamed of himself for getting us and poor Darling into this absurd situation.

And as for Berry Bros, they should stop producing stupid press releases, put their prices up immediately and flog as much fizz as they can in the next few months. That way at least they'll have a pile of cash in their coffers to see them through the many lean years ahead.