I could sense during Prime Minister's Questions moments before the budget, that the Government benches were preparing themselves for a barrage of spin, blame, and overly ambitious claims aimed to woo the British public, and also political positioning ahead of the certain general election within the next 14 months.

So, cue the Prime Minister to sit down, and the Chancellor of the Exchequer Alistair Darling to take to the despatch box. Before he even got to anything of substance, he spent nine whole minutes telling us what we already know, including that this is the worst economic turmoil for 60 years. Once he had finished with his rather self-obsessing pre-amble, it was on the with the main show, and here is where the Government spin machine went into full force. What I mean by that is, the Chancellor said; "Government action gives good grounds for confidence", "This budget will speed recovery", "We will not repeat the mistakes of the 30's depression", and "We expect the economy to start growing again by the end of this year".

Well, those are pretty bold statements straight out of the gate, which gave everyone with an interest who was watching the budget, all the more reason to listen closely. These are claims that would take a somewhat sense of amazing economic genius to pull off. The Chancellor blamed the 2007 mortgage squeeze and also the failure of Lehman Brothers for bringing the financial system to its knees, and infact thoughout the budget, the Chancellor continued to blame the global financial slowdown for the problems facing the UK.

With the Chancellor now sounding like he's surely lost the plot, he started with the figures. The economy is forecast to shrink by -3.5% in 2009, revised from his last budget where he predicted growth. In 2010 he is forecasting growth of 1.25% and then in 2011 growth of 3.5%. The forecast moving forward from there is of growth of around 2.75% year on year. Rather interestingly, his next statement was about inflation, or more to the point, the now deflationary situation the UK see's itself in. The RPI, a leading indicator of inflation in the UK is forecast to be at -3% by September 2009, a deflationary position.

Considering a deflationary position of -3% entering the fourth quarter of 2009, I find it considerably optimistic, if not fantasy that the economy can make a sudden u-turn back into GDP growth. The GDP growth between the end of 2009 and 2010 will have to be over 4% to reach the chancellors target, without taking into account the deflation figure.

If you are still with me at this point, you will already begin to notice that a lot of the numbers don't quite add up or make sense. I thought that too, so does everyone else.

The public finances were anxiously anticipated as the make or break section of the budget and the Chancellor didn't let us down. Rattling through the numbers to the point where they were almost inaudible, he announced that the Government would borrow a record amount of money over the next five years. So much infact, that he will borrow more money in the next two years, than all of the previous governments since the formation of the Bank of England nearly 300 years ago, altogether. That is one incredible fact. So here's the Chancellor's planned borrowing in black and white for you;

2009: £175bn or 12.4% of GDP
2010: £173bn or 11.9% of GDP
2011: £140bn or 9.1% of GDP
2012: £118bn
2013: £97bn

Along with the astonishingly large amount of borrowing, the Chancellor is also going to claw more tax money in through the introduction of a 50% top line tax rate for those earning over £150,000 per year, or in simple terms, 50p in every pound earned. There is 2% on tobacco, which equates to effectively 10p on a pack of fags with immediate effect, 2% on booze, which is a couple of pence on a pint of beer (although we all know that pubs and breweries round up the figures so expect a 10p jump on a pint) again with immediate effect, and 2p a litre on fuel from September.

The chancellor announced a boat load of initiatives for climate change, but frankly, listening to everything thus far, I wasn't bothered one jot what he had to say about the car scrappage scheme, and the power station initiatve, but whilst we're on the subject, the car scrappage scheme is a load of junk, and the power station initiative is a load of hot air. I'll explain why another time.

The only other real highlight, in what has to be one of the final shouts of the wounded animal that is this Labour Government, was the promise to introduce a scheme presenting either a job or training to those under 25 who have been unemployed for more than 12 months. Great, either a job or training, or no dole. It might bring an end to lazy dossers leaving school with no qualifications and then sponging of society for life. A small glimmer of light in an otherwise dismal budget I think.

So, the economy is in a mess, the Chancellor has delivered a wildly optimistic budget, with little or no chance of his forecasts actually coming through, and the city just will not go for the numbers the chancellor quoted. As a direct result of the budget, the value of sterling will decrease, and gilts will become devalued. I honestly expect the government will also struggle to raise the finance they require over the next two years via the sale of gilts, and also wouldn't be shocked if the UK's current AAA credit rating is downgraded, further worsening the situation. The IMF's figures show the UK economy will still be contracting in 2010, when the Chancellor expects growth, and that will put strain on his borrowing power. I fully expect, if this Government is still in exsistance, that sometime in 2010, the IMF may well be tapped for a bailout. Talk about embarrassing. "Bankrupt Britain", I can see the headlines around the world now.

One thing is for certain, this budget has effectively ended any chance of the Brown government winning in the upcoming election.

Video

Budget 2009

Budget 2009 - David Cameron's Response