The more idiotic of Britain's press are reporting a 'positive' reaction from the markets to today's PBR... almost as much nonsense as Darling's great one liner about "Britain entering the recession from a position of relative strength"..
Those attributing the rise in sterling and the FTSE to New Labour clearly didn't see what the markets did.. the weird spike in the 30 year T Bill on Thursday (a record), followed by the distant sound of the printing press cranking up as Obama appointed his treasury team and started talking up a little fiscal stimulus of his own.
Oil up, dollar down - Gold up, dollar being caned by the Swissie (about time too..). Cable up but sterling down against the Euro.. everything is falling into place nicely for a bout of inflation. My guess is that the dollar has rolled and it is money printing from here on in. It could be a fast drop as well, and I expect sterling to (relatively) drop with it.
And when that happens?
I wonder what a rapidly rising oil price will do to the carefully optimistic figures lined up by Darling today to justify his borrowing? How easy will it be for him to keep public sector wages under control when the imported goods his workers need are costing more already? How many business leaders are going to want to settle in overpriced, depressed Britain when the only reward they can expect is an ever increasing tax bill now that Labour's hard-left have been let out of the kennel?
Could all get rather ugly, rather quickly.