Merryn's Blog

A great day for George Osborne

George Osborne had a couple of things to smile about today. Not least the news that in January, public finances showed a bigger surplus than expected.

George Osborne must be having a great day. First, he wakes up to hear Evan Davis interviewing US Treasury Secretary Timothy Geithner on the Today programme.

Davis clearly wants Geithner to say that Osborne is cutting too fast; but he won't. Instead, when Davis leads him on with: "Isn't Osborne wrecking the chance of growth in the UK?" he just says "I don't see much risk of that at the moment." He goes on to say that he is "very impressed" by George Osborne and the "very remarkable thing" he has done in making tough choices in a hurry and "building in reforms" that are "very good" along the way.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Then he adds a little icing to the whole thing by both pointing out that Osborne is dealing with problems "not related to this government" and then having a go at Gordon Brown for his light-touch regulation and the way it was "designed consciously" to steal financial business from New York and Frankfurt. That policy, points out, Geithner, made our banking system far too big relative to the size of our economy and turned out to be "deeply costly".

Geithner doesn't give many interviews, and he both looks and sounds very clever and very serious. So that's nice for Osborne at least. But even as Osborne was basking in that glory came the next happy event the announcement that the public finances were in surplus in January. Public sector net borrowing showed a surplus of £3.735bn. That's rather better than the consensus forecast for the month of more like nothing.

Advertisement
Advertisement - Article continues below

This isn't that big a deal income tax payments mean there is usually a surplus in January. But it is a significant rise from the deficit of £1.266bn recorded this time last year and does put the government sort-of on track to meet its targets for the financial year to March: note that for the year to date the deficit stands at £85bn against £91.8bn this time last year.

It is still a vast deficit contributing to a vast national debt, but after a few weeks of rubbish data, any suggestion that their strategy might be working even a little should give the coalition the heart to stick with it.

Advertisement

Recommended

Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/516758/beyond-the-brexit-talk-the-british-economy-isnt-doing-too-badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Visit/economy/uk-economy/600824/how-the-bbc-can-survive-the-end-of-the-tv-licence
UK Economy

How the BBC can survive the end of the TV licence

The TV licence that funds the BBC is looking way past its sell-by date, says Matthew Lynn. Here's how it could survive without it
16 Feb 2020
Visit/economy/uk-economy/600837/rishi-sunak-new-chancellor-spending-splurge
UK Economy

Britain has a new chancellor – get ready for a major spending splurge

The departure of Sajid Javid as chancellor and the appointment of Rishi Sunak marks a change in the style of our politics. John Stepek explains what's…
14 Feb 2020

Most Popular

Visit/investments/property/house-prices/600840/the-biggest-risk-facing-the-uk-housing-market-right-now
House prices

The biggest risk facing the UK housing market right now

For house prices to stagnate or even fall would be healthy for the property market, says John Stepek. But there is a distinct danger that isn't going …
17 Feb 2020
Visit/economy/600838/money-minute-monday-17-february-good-news-ahead-for-the-uk-economy
Economy

Money Minute Monday 17 February: good news ahead for the UK economy?

Today's Money Minute looks to a week in which we get the latest employment and inflation numbers, plus retail figures for January and a slew of eurozo…
17 Feb 2020
Visit/economy/uk-economy/600824/how-the-bbc-can-survive-the-end-of-the-tv-licence
UK Economy

How the BBC can survive the end of the TV licence

The TV licence that funds the BBC is looking way past its sell-by date, says Matthew Lynn. Here's how it could survive without it
16 Feb 2020
Visit/investments/commodities/600729/the-rare-earth-metal-that-wont-be-a-secret-for-long
Sponsored

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020