UK economy takes a nose dive.

Well, the economic figures issued by the ONS today are grim, showing economic shrinkage of 1.9%, far worse than expected and indeed worse than government forecasts. So far, on aggregate, the economy has so far shrunk by 4.1%, and there is yet more to come.

Alistair Darling looks like he is living in cloud cuckoo land.

What is of more concern is that unemployment lags in a recession, so the numbers of unemployed will go up from here, quite a lot. 3 million unemployed could look optimistic soon. It is certainly the case that the growth figures in the budget are shot below the water line. I could accept that there might be 1 year of growth at 3.5% the year after next, but not for three consecutive years.

It is clear therefore that public spending needs to be reduced further than even Labour are considering and as I have already said, that is harsher than Thatcher's cuts.

The BBC has this.