Last week's announcement by the governor of the Bank of England Mark Carney that the base rate will most likely remain at 0.5% for another year is a reminder of how changeable the financial picture is and therefore how difficult to set spending plans for four years ahead. Sticking to a 0.5% base rate suggests that the impact of the downturn in China's economy is likely to affect the UK's own GDP which in turn could reduce forecast tax revenues. The previous week George Osborne's welfare reduction strategy was knocked off course by the Lords rejecting his controversial tax credit cuts. The week before that was the announcement that the NHS deficit is already £900m for this year with little sign of the much vaunted £22bn efficiency savings by 2020 coming through. The week before that the Office for National Statistics announced that while borrowing was £7.5bn lower in September than the same time the previous year, public sector net debt (PSND) was actually up by 1.1% compared to September 2014. The Office for Budget Responsibility (OBR) had predicted in its July Economic and Fiscal Outlook that PSND would actually be falling from 80.8% of GDP in 2014/15 to 80.3% by March 2016. It currently stands at 80.6% and has increased by £70bn since September 2015.

After five years of austerity debt is higher than ever. A principal reason for this latest increase is lower than expected receipts from the sale of nationalised assets including the Government's stake in Royal Mail whose share price has dropped. Buried in the small print is the news that the Government gifted 1% of its Royal Mail stake to employees, which is a lovely gesture but increases borrowing rather than reducing debt. Also in the ONS figures for September was the unwelcome revelation that local government borrowing was up by £1.6bn compared to the OBR's forecast in July. The OBR said this ‘represents a source of considerable uncertainty for our November forecast.' The deficit has been halved since 2009 but is still 4.9% of GDP.