It’s not that difficult to notice that we are in the midst of an economic crisis is it? This thought struck me during the weekend whilst I was on a sports forum and I noticed topics not relating to the beautiful game but to the worsening value of the pound. In amongst topics debating the visual ability of the referee there are posts relating to the cost of having to put up with such nonsense.

This is just one such example. Running a search for keywords such as ‘economy’, ‘credit crunch’ and ‘interest rate’ pulls up an astonishing amount of topic threads not related to the subject of the economy, yet find themselves containing posts referring to it.

I read with interest this morning an article on this afternoons forthcoming pre budget report in which Chancellor Alistair Darling is set to announce a £20billion fiscal stimulus. In the red corner we have Darling stating that we must act now to avoid making the same mistakes we did in the recessions of the last few decades, whereas in the blue corner it is argued that increased public borrowing will lead to higher taxes further down the line.

For me there are elements of truth in both. Whilst I would certainly support the notion of acting sooner rather than later, I would agree that making sure the credit markets are working again is every bit if not more important than any fiscal boost.

Either way, we will all have to watch how things progress in the oncoming months, most notably in January which is traditionally a ‘quiet’ month for many of us. Personally I’m not convinced that raising the tax bracket for higher earners will be as effective as hoped nor do I think that the 2.5% cut in VAT will be either, although I welcome both. The cut in VAT is supposedly to encourage spending again but in reality it will fail.

Retailers are feeling the crunch as much if not more than most, not a day goes by without hearing of another shop, pub or restaurant going to the wall. The cut in VAT gives them every opportunity to raise their prices, and just watch them do so! We live in a capitalist society and there is nothing to stop them.