At PMQs Gordon told Dave that around the world “no one except him is proposing we cut public spending at this time”. Not true Gordon, the Irish Times reported yesterday that the Taoiseach, Brian Cowen, has told senior trade union officials that the state’s borrowing figures are unsustainable, billions will be cut from exchequer spending this year. Guido will bet a lot of Guinness that as a result Ireland will be out of the recession before Britain.

Merrill Lynch has just issued a warning that “In our view, the UK faces a unique set of challenges making the sovereign and the banks especially vulnerable… We believe the issue for the UK is that asset quality deterioration across all lending types is pretty much certain.” Credit markets are roughly assigning a 10% probability that the UK will default on government debt within the next five years. If government spending is not controlled, Gordon really could bankrupt us…

UPDATE 15 January : Simon Carr’s sketch this morning makes a good point:

Cameron was wading into the VAT reduction (at a national cost of £12bn it’s giving two packets of crisps to the average family a day). Brown defended it and cited Conservative support for the policy. Chief supporter: Lord Lamont. Gordon has spent 10 years denouncing Lamont as an incompetent, malevolent, economic illiterate who was responsible for the destruction of British economy. And Cameron isn’t suitable to be in public life because he was once standing beside him in a photograph. He really is shameless, our PM.