George osborne

George Osborne's broadcast tour this morning served two purposes. The first was to reward those ministers who aren't playing hard to get in the spending review negotiations by praising their readiness to settle. The second was to prod Labour a bit. Osborne's love of 'weaponising' policy can irritate his colleagues at times, but the spending review is a welcome opportunity for the Chancellor to focus voters' minds on whether they really want to trust Labour with the economy again in 2015. He told BBC News: 'The British people will decide who's the government in 2015 but the financial year starts before the general election, so we have to set out spending plans like any organisation. 'You have to give departments a budget for the rest of the year.

George Osborne has got through the IMF’s report on the UK economy. It is far from a ringing endorsement of his approach but, as Isabel notes, its criticisms are couched in such opaque language that I doubt they’ll have much political impact. I also suspect that the Treasury is not unhappy about being told that it needs to get on with returning RBS and Lloyds to the private sector. Selling even a tranche of these bank shares before 2015 would be politically powerful, aiding the Tories in their attempt to argue that they’ve been clearing up the mess that Labour left behind. The next challenge for the Treasury is the spending review.

If four years ago, a Liberal Democrat politician had attempted to portray the Lib Dems as the natural party of government we all would have laughed. But that is just what Danny Alexander tried to do on The Sunday Politics. Being interviewed by Andrew Neil, he implicitly contrasted Lib Dem steadiness with Tory in-fighting. He said: “You know some people at the time in 2010 said that it would be difficult to keep a coalition going because one party might not be able to remain united and disciplined. Let me reassure you and your viewers that Liberal Democrats will make sure that this government continues to be strong and stable enough to be able to take the difficult decisions in the years to come, no matter what’s happening in other parties.

It is probably unfair to say that the Queen's Speech will have nothing to do with the economy: we are, after all, expecting a deregulation bill among others, which the Treasury hopes will speed things up for small businesses. But if George Osborne looks a little distracted today, it's probably because his mind is on events outside Parliament. The International Monetary Fund's team arrives in London today for the start of a fortnight's inspection of the UK economy. The Chancellor must feel sympathy with teachers who fear the approach of their school's Ofsted inspection. Like teachers who suspect their Ofsted visit won't go their way, Osborne's allies have recently started to question the wisdom of the IMF, an organisation he has previously set great store by.

Marilyn Monroe didn’t do it for the money, and neither did Bob Diamond. Seriously, the man dubbed the ‘unacceptable face of banking’ is just a regular family guy; Jimmy Stewart rather than Gordon Gekko. The recovering financier has told the New York Times: ‘This is going to sound arrogant as hell but I never did anything for money. I never set money as a goal. It was a result. And if you look at how Jennifer and I and our three kids have lived our lives, as soon as we had any money at all, we created a family foundation. The only car I own, honestly, is an 11-year-old Jeep on Nantucket. I think Jennifer and I have always had a great home for our kids. We really like to take vacations with them, so those are good.

The married couple’s tax allowance is back on the agenda. After Conservative Home’s exclusive yesterday, David Cameron has confirmed that he will introduce one before the end of this parliament. This would allow couples to share a proportion of their personal allowance, lowering the tax bill for those household where one person stays home to look after the children. Cynics will suggest that this is a good time to float a policy particularly popular with the party base given that there are county council elections on Thursday. But Cameron is a bigger enthusiast for recognising marriage in the tax system than most of his Cabinet colleagues. In opposition, George Osborne always worried that it looked like a measure designed to encourage mothers to stay at home.

George Osborne might have used Justin Welby's comments on the problems with the banks this morning as a sign that he has at least one ally out there, but this afternoon, the Prime Minister's official spokesman distanced the government from the Archbishop's use of the word 'depression' to characterise this country's current economic circumstances. He said: 'The Prime Minister agrees with the point the Chancellor of the Exchequer was making when he was asked that question this morning. What the Chancellor said was that he agreed with the Archbishop's analysis that we have a slow and difficult recovery because of the problems in the banking system and those are the problems that need addressing.

Fitch has today followed Moody's in downgrading Britain from AAA to AA+. The reason? George Osborne is borrowing far too much.  In its verdict, it said that gross debt "will peak at 101% of GDP in 2015-16...and will only gradually decline from 2017-18." The Chancellor, of course, had once set a rule to "ensure that debt is falling as a percentage of GDP by 2015". This has been abandoned, and the downgrades are the consequence. Fitch doesn't break down its forecasts, but it's likely they follow those made by Michael Saunders at Citi:-                       For all Labour's talk of austerity, George Osborne is borrowing more over five years than Labour did over 13 years.

It was only last week that a Tory MP was warning Coffee House of the dangerous impact that high levels of public debt can have on growth. Today that theory is fighting for its life, with the authors of the Harvard paper that developed it in the first place in the firing line for an error in a spreadsheet. If you haven't been following the Reinhart and Rogoff row, here's a quick catch-up: a paper from two professors and a doctoral student at the University of Massachusetts published this week argues that Carman Reinhart and Kenneth Rogoff of Harvard were wrong to reach the conclusion they did about a 90% debt to GDP ratio seriously affecting the growth of a country's economy.