The Winter of our Content

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Summary

Back in May 2007, The Treasury’s Budget Economic and Fiscal Update happily predicted that by 2011 core Crown revenue would be just under $67 billion; core Crown expenses would be just under $65 billion, and core Crown debt would be just under $7 billion.

Four years on, and one global financial crisis later, the same Treasury is now estimating that this year, core Crown revenue will be just $57 billion; core Crown expenses will reach nearly $73 billion, and core Crown debt will be over $41 billion.

The difference, of course, is due to the global financial crises which clearly no one in Treasury and, in fact, few people in the business of economic forecasting, saw coming. The experience of getting it so wrong seems to prove the quip of American Economist Ezra Solomon when he said that the ‘only function of economic forecasting is to make astrology look respectable’.