Two bombshells have landed pre-Budget. One: tax receipts are falling even faster than we thought (central government revenues down 12% in March, a record drop) and the 2008-09 deficit to £90bn, double the £43bn Darling forecast in his last Budget. Black hole, anyone?
Next: claimant unemployment is now 1.46m. Last October, in his PBR, Darling forecast 1.41m unemployed by the end of the year. It hit 1.46m by March – the highest in 12 years. So how much worse can it become?
The below graph, from Citi, is worth a thousand words. This isn’t even the end of the beginning.
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