Guessing the GDP in the leaders debate

We knew that the deficit was massive. Today we got confirmation that last year Britain borrowed a peacetime record, just below 11 per cent of national income. It is a mammoth sum, the sort of fiscal carnage only normally wrought by worldwide war.

The news today, however, was that last year’s deficit ended up slightly smaller, about £4bn smaller, than the budget had outlined last month. Not exactly time to get the bunting out, but it’s worth remembering that a year ago, many external economists were expecting the deficit to top £220bn.

The deficit certainly towers above any other statistic, and will be used to bash Gordon Brown tonight. But Mr Brown, and Mr Brown alone will have another statistic in his head.

As prime minister, he has been given access to the absolutely key Q1 GDP figure, due for release at 0930 tomorrow, but available 24 hours in advance to ministers.

There had been a slim chance that snow and the VAT rise could have seen a relapse into recession, just days before the election. Now it’s thought that we are likely to get a solid number, neither the roar of a renewed boom, nor the squeak with which Britain emerged from recession.

The number will enable Brown and Darling to make the argument that they have stewarded the economy in to a safe harbour. Perversely if it is too high, they then lose a whole line of argument that the Conservatives rapid spending cuts will risk a double dip. A Goldilocks number, neither too hot nor too cold would be around 0.4 per cent.

That said the revision of the deficit down by £4bn really does expose the narcissism of small fiscal differences. That £4bn error between March and April, is almost as much as the £6bn difference in fiscal plans which Labour argue will “wreck the recovery” or the Tories suggest will lead to fiscal “ruin”.

Anyway if you get bored with the Clegg-baiting tonight see if you can guess the GDP number from the size of Gordon Brown’s grin.

And if I was David Cameron, I’d be a little cautious about playing up that hung parliament/ IMF rescue line too much. Capital Economics and Pimco don’t seem to agree.