Coalition’s economic gamble still stands

 The coalition took a gamble in 2010 when it promised to eliminate the deficit over the course of this parliament. Its bet was that private-sector growth would outpace the planned public sector contraction. That gamble still stands. None of the measures announced in the Budget on Wednesday guarantee it will be won.

The hope, when chancellor George Osborne delivered his emergency Budget last June, was that the negative effects of fiscal tightening on growth would be offset by monetary loosening by the Bank of England. This was the coalition’s real Plan B. But with the Bank’s monetary policy committee increasingly boxed in by fast rising inflation, this looks less sustainable.
http://link.ft.com/r/S4XZQQ/72GHXD/TP3TEW/40LVA1/HD2AFB/QR/h?a1=2011&a2=3&a3=23