How likely does Cable think a double-dip recession is?

Vince Cable, Business Secretary, says “well below 50-50”; the Treasury says one in five.

Decca Aitkenhead's enjoyable interview with Vince Cable in today's Guardian includes this revealing exchange on the possibility of a double-dip recession:

The risk of a double-dip recession remains, he acknowledges, very real -- perhaps a little more so in his mind than the Treasury's. "As I recall," he says, "the government's own forecasting risk puts it at something like one in four, one in five." But asked for his own estimate, he says, "Well, you know, certainly well below 50-50," which sounds somewhat higher than one in five.

Like Nick Clegg's declaration that he had slept with "no more than 30" women, this is an answer that reveals far more than it intends to.

As Aitkenhead suggests, "well below 50-50" does sound rather higher than one in five. If we take into account that a cabinet minister quoted on the record is unlikely to suggest that a recession is probable, it's quite possible Cable thinks this is an underestimate.

It may be that he has studied the growing evidence of the risk of a double dip, long forecast by our economics columnist, David Blanchflower. Today's news that the recovery in the jobs market will stall this year is another sign of the trouble ahead.

To his credit, Kenneth Clarke has previously warned that a double-dip recession is "quite possible still" and that the coalition's cuts could damage growth. Let us hope that he and Cable are having words with George Osborne.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.