“Dire”, “parlous”, “awful”, “dreadful”, “shocking” are just some of the adjectives the Financial Times’ panel of economists used to describe the public finances. Successive years of missed tax revenue forecasts and the government’s acceptance of high deficits in good economic times led almost nine in 10 economists surveyed to assert that the national coffers were not in reasonable condition.

Economists Survey

The results in full
Q1: What are the 3 main risks to economic stability in 2008?
Q2: How does the credit squeeze change the job of central banks?
Q3: How deep will the correction be in the housing market?
Q4: How far is it possible to ignore short-term inflationary pressures?
Q5: What needs to be donw with the public finances?
Q6: Are emerging economies the next global bubble?
Q7: To what extent will the US election affect the world economy?
Q8: Where will Northern Rock be this time next year?
2007 survey

With the public finances already deteriorating in 2007-08, David Smith of Beacon Economic Forecasting says they are in “dire shape for an economy that has not suffered a recession”.