Darling realistic but optimistic

Alistair Darling was mocked after his interview with the Guardian during the summer recess in which he made dire warnings about this being the worst recession for 60 years.

Well he may now be correct and this morning gives an exclusive interview to the Independent which is well worth a read

"There is a way to go yet. There will be a few bumps on the way and we are going to have to negotiate our way through that difficult time. The world has been hit by two great shocks at the same time – the credit crisis, the more enduring and difficult one – and a very large spike in energy prices."

is his synopsis of the situation facing us which ties in very much with what Mervyn King was saying yesterday but he remains optimistic

We have had 10 years of very solid growth in this country. We reduced the debt we inherited and spent money where it was needed on schools, hospitals and transport. We also go into this period with interest rates the lowest since the year after I was born [1954]. Inflation is coming back down."

And he insists that his fiscal stimulus is the correct thing to do

You should support the economy at the present time. It would be utter madness to start taking money out of the economy at the moment. That would make a difficult position even worse,"