Balancing act to slash debt but avoid recession

POLITICS has been called the art of the possible. To Rishi Sunak it must appear more like the art of choosing between the impossible and the unbelievable.

- Lord Lamont

It must be bewildering for someone who has risen so rapidly. No recent government has faced such an accumulation of challenges.

Looming this week is the Chancellor Jeremy Hunt's Autumn Statement. Nominally it is called the Chancellor's statement but much of it will originate from Number 10 and will be regarded as such. This means the statement will be as much a political event as an economic one.

Both Sunak and Hunt have been brutally frank in stating that the country faces an economic crisis.

Swingeing spending cuts and tax increases are in prospect. Manifesto pledges can no longer apply.

Keir Starmer would have us believe that this is all of the Government's making. While Liz Truss's mini-Budget damaged the Government and upset the markets, the greater part of our present problems reflect global factors: Covid, the sharp rise in energy prices and the war in Ukraine. Did anyone seriously believe the furlough scheme or the energy price guarantee just came free as a gift from the Government? The immediate issue is how to plug the so-called "black hole" in the national finances. The task is to get the country's debt back to a level that is sustainable in other words, affordable. Governments, just like individuals, are affected by interest rates and inflation.

The Thursday's statement will be a difficult balancing act.