Cable warns of trouble ahead

Business Secretary refuses to rule out possibility of a double-dip recession.

A year on from the Spending Review, the coalition's soothsayer has emerged to offer another gloomy economic prognosis. Asked by ITV News whether he could promise that there wouldn't be a double-dip recession, Vince Cable replied: "I can't do that. We know conditions are very difficult but the government is doing the best it can to protect people." The Business Secretary spoke only of the "possibility" (hastily adding, "well indeed the certainty") that the coalition would turn things round.

It's not the first time that Cable has warned of a double-dip. In an interview with the Guardian's Decca Aitkenhead last August, he noted that the government's forecasts put the risk of a double-dip "at something like one in four, one in five" but he would only say "well below 50-50" (a figure that sounded rather higher than one in five). Then there was his interview with NS editor Jason Cowley, in which he spoke of the danger of another "financial bomb" going off.

As ever, there is something admirable about the Business Secretary's economic realism. But it prompts the question: what is he going to do about it? In some ways, the government has already adopted a plan B in the form of credit easing, accelerated deregulation and more QE by the Bank of England (described by George Osborne in 2009 as "the last resort of desperate governments when all other policies have failed"). The question remains whether it will change course again by temporarily slowing the cuts or offering further fiscal stimulus (a plan C, if you like). For now, there is no sign of that. But Osborne's Damascene conversion to quantitative easing is a reminder of how even this most stubborn of Chancellors can change his mind.

Announcing a second round of QE earlier this month, Bank of England governor Mervyn King remarked "When the world changes, we change our policy response." Cable's pessimism will only increase the pressure on Osborne to change his.

George Eaton is political editor of the New Statesman.

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Northern Ireland's political crisis ups the stakes for Theresa May

Unionism may be in greater immediate danger in Belfast than Edinburgh.

 Sinn Féin have announced that they will not put forward a candidate for deputy first minister, and barring a miracle, that means today's 4pm deadline for a new power-sharing executive will come and go. What next for Northern Ireland?

While another election is possible, it's not particularly likely. Although another contest might change the political composition at Stormont a little, when the dust settles, once again, the problem will be that the DUP and Sinn Féin are unable to agree terms to resume power-sharing.

That means a decade of devolved rule is ending and direct rule from Westminster is once again upon us. Who benefits? As Patrick explains in greater detail, a period of direct rule might be good news for Sinn Féin, who can go into the next set of elections in  the Republic of Ireland on an anti-austerity platform without the distracting matter of the austerity they are signing off in the North. The change at the top also allows that party to accelerate its move away from the hard men of the north and towards a leadership that is more palatable in the south..

Despite that, the DUP aren't as worried as you might expect. For one thing, a period of devolved rule, when the government at Westminster has a small majority isn't without upside for the DUP, who will continue to exert considerable leverage over May.

But the second factor is a belief that in the last election, Arlene Foster, their leader, flopped on the campaign trail with what was widely derided as a "fear" message about the consequences of the snap election instead of taking responsibility for involvement in the "cash for ash" scandal. That when the votes were cast, the Unionist majority at Stormont was wiped out means that message will have greater resonance next time than it did last time, or at least, that's how the theory runs.

Who's right? Who knows. But for Theresa May, it further ups the stakes for a good Brexit deal, particularly as far as the Irish border is concerned. A lot of the focus - including the PM's - is on her trip to Scotland and the stresses on that part of the Union. It may be that Unionism is in greater immediate danger in Belfast than Edinburgh.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.