James Moore: Ease off from cuts and let the economy breathe

Outlook It's not only his Banking Commission that's causing Mr Osborne an unexpected migraine. Yesterday's public sector borrowing figures added weight to the view that he's more likely to persuade members of the commission to lie down and have their tummies tickled than he is to meet his public sector borrowing targets.

Monthly figures have to be treated with a degree of caution but the £8.6bn he had to cadge to make Britain's books balance in October confirms a nasty-looking trend that will take more than yet another dose of quantitative co-proxamol from the Bank of England to ease.

The figure is £2.7bn worse than that recorded in October last year and £2.6bn worse than the City's consensus forecast. Dr Osborne will outline his prescription for dealing with the problem in his Autumn statement and the chances are it will be more of the same.

For which read cuts, or exactly what a shaky economy doesn't need because they'll strip confidence and cash from consumers who are already feeling the squeeze.

It's true that Mr Osborne was dealt a rotten hand when he came into office. The last government ran an enormous deficit when the economy was rosy, leaving nothing set aside for when things got sticky. Gordon Brown's golden rule was made of the fool's stuff and Mr Osborne has been left with the mess.

His best bet would be to ignore the latest setback, and the fact that he is going to miss his targets, and give the economy a little breathing room.

If he does that the situation may begin to improve on its own. It's not as if Britain's borrowing costs are high, and as for the much vaunted triple-A credit rating, who cares? The market makes its own mind up these days.

Unfortunately just doing nothing like this would require Mr Osborne to demonstrate that he has a little more flexibility than he has so far shown he possesses.