Pre-Budget Report

My Lords, this was the IMF’s standard spring report. It is backward-looking and forward-looking. The terms used here very much pointed to the future, which will provide, "““a strong foundation to weather global shocks””." I suspect that we will not agree on that, but I am clear that the quotations I have used are correct. I am not as clear that the IMF used the term ““reckless””. The noble Baroness asked three questions, which I shall seek to answer. First, it is not the Treasury’s policy in making economic forecasts to make assumptions about unemployment, other than regarding the operation of the automatic stabilisers. That has been the Treasury’s position for many years. The noble Baroness then asked about the funding of the government borrowing requirement. The noble Lord, Lord Higgins, referred to that, and I shall return to his point later. I would simply observe that the DMO has expressed its confidence about the fundability of the public sector requirement, that gilt yields are at a low point, compared with the past 50 years or so, and, indeed, that the sterling premium over German federal government borrowing rates is currently running below trend. That is evidence, if one wishes to look to the markets, and I believe that the markets can be used to prove just about—