In the wake of Alistair Darling and Mervyn King’s speeches at Mansion House last night, most of the papers are majoring on the sorry state of our economy. Both Darling and King indicated that this is the worst shape it’s been in for around 15 years, and warned that there’s worse to come. For the gloom-inclined, we’ve pulled out some of their main points over on Trading Floor.
And whilst we’re on the subject of the economy, Anatole Kaletsky’s article on inflation in this morning’s Times is essential reading. In it, he expresses doubts over Gordon Brown’s ability to handle inflationary pressures in the right way:
“The second genuine reason to worry about the inflation figures is the challenge they pose to the Government. Will Gordon Brown withstand demands for public sector pay increases to compensate for the rising cost of living? If he gave in to such demands, the result really could be a 1970s-style wage-price spiral.
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