The tightrope that Sunak will still have to walk

AFTER all the leaks and counterleaks, Rishi Sunak’s red box today contained a pretty good balance of pain and gain.

While he managed to sound tough on balancing the books and reining in public spending, he made clear he’d only start cracking the whip once the private sector had picked up enough to afford it.

This handing-off of the burden of supporting jobs and the economy from public to private will be the trickiest of highwire acts.

Rein in public support too fast, and we topple into an epidemic of unemployment, trampling any recovery in demand.

Do it too slowly, and you apply so much stimulus to the economy that inflation surges and the Bank of England has to put up interest rates. Also trampling demand.

Sunak does get this, but he was far too slow to extend the stimulus when extra thrust was needed to the Treasury’s booster engines in the past quarter.

We all knew back in December when the second wave of Covid came in that businesses would need an extension of support schemes beyond March and April.

But rather than give shuttered hotels, restaurants and pubs the certainty they needed, he dithered until today.

In the meantime, companies already hugely indebted have gone to the wall, unable to obtain loans from banks because their futures were so uncertain.

That said, with a fair wind behind us, thanks to our successful rollout of the vaccines, we should be in for a healthy economic recovery this year. Today’s Budget will do nothing to jeopardise that.