Bill Jamieson - Troubles heading from High Street to Downing Street

REPORTS of a morale meltdown at the Treasury, with mounting worries over the state of the public finances, completed a week of utter misery for Chancellor Alistair Darling. The problems he faces are far greater than the prospect of the National Audit Office declining to 'sign off' the accounts due to be published before the parliamentary recess in three weeks' time. A yawning gap is now opening up between forecasts of t ax revenues and the likely reality over this fiscal year and next. A second related concern is the effect that a crisis in the public finances this autumn would have on the pound. Any sharp weakening of sterling would drive up import bills and heighten the inflation threat, forcing the Bank of England to put up interest rates. The Government sector may soon be facing a severe credit crunch of its own as the... [read full story]