Today the Chancellor, Alastair Darling, delivered what was billed as one of the most important Budget speeches in decades. Backgrounded against rising unemployment and the prospect of deflation this was, in many ways, not an usual context for the unveiling of annual public spending. But with part and fully nationalised banks, unprecedented levels of public debt and a spiraling pension deficit the 2009 Budget was largely plucked from unknown territory. Here’s what the media made of it:

Alastair Darling says the UK economy will begin to grow again in 2010. Oh no it wont says the IMF and the Times’ Gary Duncan:

The IMF dealt a severe double blow to the Chancellor’s new forecasts barely an hour after they were unveiled.

The Guardian’s Larry Elliott says Darling’s optimism – even with record public debt projection – is misplaced:

He still believes that the combination of cheap money, lower inflation, a weaker pound and fiscal easing will deliver a V-shaped recovery, but has now put back the timing of the bounce until the end of 2009. This does represent a colossal stimulus and it may start to work sooner than the pessimists think.

Edmund Conway, writing in the Telegraph reckons that no investor worth his salt would touch Britain with a bargepole after today, as markets testified:

As soon as Alistair Darling sat down and the Treasury released the full details of its borrowing plans, the screens started to bleed red.

In the Mail, Quentin Letts satirises Darling’s biological inability to deliver any speech with more zazz than a bag of plain rice:

We sketchwriters used to think Gordon Brown the all-comers’ champion Budget bore but this fella makes Broon look like Ken Dodd.

The Standard’s Anthony Hilton feels a sharp, jarring pain along with 350,000 people whenever they reach for their wallet:

Making the rich pay up may be popular but there are not enough of them to raise the billions he needs.

The Times’ Danny Finkelstein, writing on Comment Central, is sure that Darling has handed a massive shiny present to the Tories:

In other words, until now the Tories could not oppose the 45p increase unless they were actually willing not to do it and fill the hole with some other measure in a campaign. Now they can distinguish between opposing it and giving an instant promise of repeal.

The FT’s Martin Wolf does not like the look of Darling’s books one little bit:

This is a horror story. But it could, of course, be worse: the economy may not recover as hoped; losses on support for the banks could, as the International Monetary Fund suggests, be far bigger than the 3.5 per cent of GDP now expected; and, above all, the creditworthiness of the British government could come into question, with devastating consequences.

Mark Deen, for Bloomberg, was bad news for drivers. And smokers. And drinkers. And rich people obviously:

Chancellor of the Exchequer Alistair Darling raised taxes on British motorists, smokers and the rich to contain an unprecedented budget deficit as he forecast the worst recession since World War II.

At the BBC, you know who focuses on something sensible like tax relief for businesses on capital spending:

Actually, it’s the increase to 40% in tax relief to businesses on capital spending, for one year only – which is forecast to cost £1.64bn.

Sky says that small businesses’ response to the Budget is the professional equivalent of sticking your ears out and blowing a huge raspberry:

As for the higher tax bracket increase, they shouldn’t have done this now, as now is the time in encourage entrepreneurs, not discredit them.

And finally, Tony Bonsignore at City Wire, makes the under-reported point that this 50 per cent tax malarkey carries a whiff of political posturing:

If there was ever a time for a shift to the left, for a political throw of the dice, then this was it.

Voltaire (1694 -1779) was a mere glint in his Father's eye when the Bank of England set base rates at 2 percent

The Bank of England has never had a lower base rate of interest. Not once, in over 300 years, has the Bank offered money more cheaply.

For an institution that predates the birth of Voltaire, the Bank’s decision to shave another 1 percent off base rates is historic. The last time interest rates were this low, Winston Churchill was still prime minister.

What does this mean for you? That depends on who you are.

If you have a tracker mortgage (that moves with the BoE’s base rate), then you’ll have more money in your paycheck at the end of the month. You’ll get additional breathing space to go with that being prepared by the government should things turn out poorly.

(That said, many tracker mortgage providers have ‘floors’ that are activated if the base rate falls through it. Which it has. For example, Nationwide’s tracker floor is at 2.75%, so many customers wont see too much of a pass on.)

If you want a new mortgage, it might take a little longer for banks to start offering money at previous levels. But a little creepiness from Mandy should sort that.

If, however, you’re one of those increasingly rare breed – known as ’savers’ – this rate cut is most unwelcome. People who have worked hard and put money aside for this torrentially rainy day will have found their income cut by more than half over the past month.

There are questions that need answering. How does the government hope to wean us off debt culture when the central bank is ramming virtually free money into our hands? Why should people who took out mortgages they knew were too expensive profit when prudent savers are set to lose out?

The City has welcomed the Bank’s decision. The government will now position itself as the party of financial fairness by pushing banks to keep lending. And we will probably now spend slightly more over Christmas than we had planned.

Was it Voltaire who said,

Everything’s fine today, that is our illusion?

The latest Populus poll shows that only a third of people in Britain support Labour’s plans for borrowing and public spending outlined in the Pre-Budget Report.

This is perhaps uninspiring stuff. After all, Brown is gambling on the British economy making a remarkable recovery in line with some optimistic predictions. He and his cohorts have been wrong before.

Brown’s support from middle-class voters has plummeted 10 points to 42, still ahead of David Cameron on 36. This, again, is unsurprising given that the truth about NI hikes is now being realised.

More surprising is that only 1 in 4 people questioned thought that Labour’s extreme ratcheting of public debt levels would be bad for the economy over the next few years. Maybe they’ve been taking clairvoyance lessons from the Chancellor – the man who predicted growth this year would be 2.25% and that there would be no recession.

Also – tellingly – over half of people questioned say that any money saved from Darling’s PBR will be exactly that: saved. Any fiscal relief – small, populist measures – will not help stimulate the economy.

People are already in a hole after a decade of easy debt proliferation. They are looking to cut losses, not go and create potential for more.

If being bold is what is needed, Labour has missed a trick. And it looks as though the public are starting to notice.

On Monday, the Government predicted the percentage of national debt will reach 57% by 2013 and that the country would be back to ‘borrowing to invest’ by the beginning of 2016.

The obvious question is how on earth can they know that? Darling has been wrong before, forecasting a wildly optimistic national growth in his last budget. And compared to these days of wildly fluctuating markets, the last budget was a put-your-house-on dead cert to predict.

Yet he still was wrong. Now, at the same time as Bank of England suddenly decided that 5% interest was acceptable in a faltering economy one day and then 3% was better the next, how can Darling hope to predict anything accurately? It simply cannot be anything other than wild speculation or blind hope.

Mervin King’s favourite book in times of need is by a man called J. K. Galbraith, a sort of Nostradamus on Lithium. In Crash of 1929, Galbraith says:

There are two kinds of economist, those who don’t know what will happen and those who don’t know they don’t know.

Now Mr. Darling is no economist. But he could at least have the courtesy to admit that he knows more about Margaret Beckett’s underwear draw than he does about the economy.

Do the banks have any moral obligation to hand on the Bank of England’s base rate cut?

The Nationwide, HBOS, the RBS/NatWest group and our own Northern Rock have announced that they will pass on the full cut of 1.5% to its lenders in December. It seems Darling’s enticements of “coffee and bacon rolls” sufficiently appeased/threatened bank chairmen to help out borrowers and small business owners.

Admittedly, this will help many homeowners struggling to meet their mortgage repayments. It will also help businessmen borrow at more competitive rates. But a cut in the Bank of England’s base rate wont help the banks themselves.

Because banks don’t tend to borrow from the Bank of England, they borrow from other banks. The Libor, although on the way down, is still far higher than 3%. Any liquidity that the Treasury had hoped the Bank of England’s violent rate slashing would produce will not materialise until the rate of lending between banks dips further.

Governmental and retail pressure has seen banks capitulate in their refusal to alter rates offered to customers. Such political posturing epitomises the mess that part nationalisation has produced for all concerned parties. As preference shareholders in the big commercial banks, the Government (and, by extension, us) should like them to make a quick profit and pay us back. But they won’t make a quick profit by lending at unrealistically low rates.

Furthermore, if the easy availability of debt and mortgages the public couldn’t afford were what got us into this pickle, does anyone really expect more cheap lending to help? People on the high street – the same people who will struggle to make their repayments, who may have to close their businesses – need get used to spending and borrowing less.

The banks are trying to save themselves. But in doing so, they just might be teaching us all a valuable fiscal lesson.