With Marchs Budget looming, the week has delivered mixed news for the Chancellor. Very low inflation has both pros and cons for the public finances and subdued pay growth wont help. And Januarys disappointing fiscal numbers make it almost certain that Mr Osborne will have to announce an upward revision to the OBRs borrowing forecast on 16 March. Given global economic troubles and the weight that monetary policy is already bearing in supporting the economy, the Chancellor will hopefully avoid the temptation to tighten fiscal policy still further. But on a more positive note, the appetite of UK consumers to spend continues unabated.
