Has Jeremy Hunt done enough to save us from recession?

There is no way of sugar-coating the harsh facts, writes Hamish McRae

We have only got the tax side of Jeremy Hunt’s plans, not the spending side (Reuters)

Recession next year for the UK is now pretty much inevitable. There is no way of sugar-coating that harsh fact. It will be caused as much by the near certainty of a recession in the rest of the developed world as by the inept policies of this current government – but that is no comfort at all.

The only comfort we might take is that the downturn does not, on the evidence so far, look likely to be particularly severe in terms of job losses, though living standards will take a big hit.

Thinking of the UK first, Jeremy Hunt has done enough in his first four days as chancellor to cut the UK government’s borrowing costs to pretty much the same level as those of the US: the benchmark 10-year yield for each country is a bit over 4 per cent. The pound has steadied, and business economists have started to cut their forecasts for the peak in the Bank of England’s base rate, from 5 per cent or more to 4 per cent.