CITY AND SUBURBAN
Slipping into a hole, the Chancellor senses that he may have to dig again
CHRISTOPHER FILDES
t happens to chancellors, sooner or later. Like the privy-builder in The Specialist, they dig a hole and perch on top of it, proud of their handiwork. Then the wind changes, and an uneasy sensation begins to steal over them that sooner or later they will have to dig again. They have paid insuffi- cient attention to the golden rule: dig her deep and dig her wide. Now watch it hap- pening to Gordon Brown. In his place of pride, new and unwelcome sensations begin to swirl round him. The figures for trade and inflation and pay settlements and retail sales and the money supply all tell the same story, of an economy which has been grow- ing too fast and consuming too much for its own comfort. It will have to slow down, says the Governor of the Bank of England, who is pushing interest rates up and wishes he had started earlier. He should have taken my advice in April and reinforced the Mon- etary Policy Committee with the grand old Duke of York. The sooner interest rates are marched to the top of the hill, the soon- er their commander can think about march- ing them down again. The Chancellor's first instinct is that it's our fault. How short- sighted we all are to ask to be paid more! We might retort that it's his fault. At this stage of the game his budget ought to be in surplus, not just at break-even. This month he budgeted to spend more and go on spending. I expect him to come to regret that. He is slipping into a hole and may not have the chance to stop digging.
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