Treasury

Well, as expected, the IFS have put the lie to Darling’s claim that the budgets of non-ringfenced departments would be “pretty much flat”.  Here’s how Nick Robinson reports it: “The Institute for Fiscal Studies says that government plans imply £36bn of cuts in departmental spending ie over 19% from 2011-2014 in order to protect schools, hospitals and increase overseas aid. They say the police pledge is meaningless. They also say that defence, higher education, transport and housing are most likely to be hit.   The cost of paying back the debt over the next eight years is equivalent to £2,400 per family in taxes or cuts over that period.” UPDATE:

Labour briefed out its plan to tax banks that pay bonuses so extensively that everyone in the City knew it was coming. The result is that a slew of banks paid their bonuses out early. Small, private banks that aren’t encumbered by bureaucracy moved to award their bonuses early as soon as these stories started appearing in the papers. The legislation says that the moment when the tax is awarded is when the tax applies, so if a bank awarded its bonuses as late as Monday — when the details of this plan were all over the papers — they avoided the charge. As one City accountant who works with

The press didn’t like Darling’s budget – and neither do the markets. What Darling didn’t say yesterday is that the Treasury is looking to borrow £243 billion from the City by the end of the financial year – this info was slipped out by the debt management office (link here). Brother, can you spare a quarter of a trillion quid? The markets are not sure they can. Gilts are being hammered today – biggest single day sell off for some time – 13bps so far this morning on 10yr gilts. They now stand at 63bps above German bunds, the widest since the crisis started. On another measure, Credit Default Swaps,