the little political news that there was focused on David Cameron saying there wouldbe no swingeing cuts in public services in the first year of a Tory Government. It is hard to know what is meant by swingeing, let's say 10% - so in deficit terms that is about £18 billion of spending.
However in terms of what the Government actually spends that is about 3% of spending. I don't regard cutting expenditure by 3% as swingeing; The only person I know in reality who thinks like this is Mrs. CU.
Instead we have Labour and the Lib Dems getting hot under the collar about this pin-head dancing.
The reality is going to hit the country hard (in terms of the market reaction) that 10% or more will be needed to just stave off disaster. How some politicians like Peter Mandelson think that the UK is OK and not near default is beyond me; A simple analysis says that if you are forced to print £200 billion then there must be some rather large holes in the income statement.
It still feels to me like the Politicians of all 3 main parties are leading us don a very dangerous path, much like the 1970's. We have tried this attempting to spur growth through deficit spending before, both Labour an Tory; it led to the IMF crisis of that time. Due to electioneering UK voters want are not being told the truth, so instead it will be a bigger shock when reality hits.
The way to play it for oneself is to short gilts in the run up to the budget and for the rest of the year after that. worst case that will be a 10-20% play; if there is a debt crisis then the return may make up for some fo the currency value loss we will all suffer.