The headline to the first does what it should do - point to the core fact of the news below. The trouble is that the rest of the article is - as one must expect from the Telegraph news columns these days - a mixture of half-truths, irrelevant side-issues and sheer spin.
The second is from the excellent Business News. I agree totally. As a leading stockbroker told me this week - - “I think the market has risen far beyond the level that the immediate economic prospects would justify and the bounce in the banking sector is doubly inexplicable”.
Christina
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22.8.09
1. David Cameron: Cutting spending and debt 'will make or break my Government'
David Cameron has said that controlling the growing Government deficit by cutting spending will be the defining struggle of a Conservative Government.
By James Kirkup, Political Correspondent
The Tory leader predicted that he will be judged in office on how he handles the public finances.
“Getting the deficit under control will make or break my government,” Mr Cameron said in an interview with the Economist magazine.
He also signalled that the Tories will fight the next election on a clear pledge to reduce public spending. “I can’t think of an opposition party going into an election promising spending cuts since 1929,” he said.
To fund his programme of public spending, Gordon Brown has set out plans to borrow much more, doubling the national debt to £1.4 trillion by 2013.
Even Labour’s grimmest forecasts for Government borrowing may be surpassed: figures this week showed an unprecedented collapse in corporation and income tax, meaning the Treasury may have borrow even more than the £175 billion it has forecast for the year.
Mr Cameron has said the scale of Britain’s borrowing is a “disgrace” and warned that the Government runs the risk of defaulting on its debts.
Still, he has been cautious about setting out exactly how a Conservative Government would go about cutting the deficit.
Labour is planning to fight the next election by accusing the Tories of planning cuts in front line public services. The Tories counter that cuts will be necessary whoever wins the election.
Mr Cameron has pledged to make real-terms increases in the health budget. Independent economists say that would force a Tory Government to make deep cuts in other Whitehall budgets.
The Tories are now gearing up to present their plans for cuts as virtue, arguing that Britain’s long-term economic prospects depend on curbing the deficit.
The Conservatives until earlier this year pledged to match Labour’s spending plans.
The Tory leader said he should have been quicker to accept the need for spending cuts.
“We should have abandoned Labour’s spending plans sooner,” Mr Cameron said.
Mr Cameron’s use of the future tense, instead of his usual conditional form, to discuss a Tory government may lead to Labour taunts of complacency over the outcome of the next election.
Although the Tories have a comfortable average opinion poll lead of around 12 percentage points over Labour, they have been hit a string of minor presentational problems over the summer.
Alan Duncan, the shadow leader of the Commons, undermined the Tory message on reforming MPs expenses when he was caught complaining that MPs have to “live on rations”
Mr Cameron also rebuked Daniel Hannan, a Tory MEP, for criticising the NHS, a move that angered some right-wing Conservatives.
The Tories’ troubles have led some Government insiders to toy with the idea of a general election in the autumn, but most believe Mr Brown will wait until next May before calling the poll.
2. The bulls are in a china shop as this fragile rally threatens to crash
The bulls took control again on Friday, propelling the FTSE 100 to a new 10-month high as we followed the US markets upwards. OK, volumes remain thin, but this rally is nevertheless developing some real momentum.
By Richard Fletcher, Executive Editor, Business
So much for that old stock adage: Sell in May and go away. Stay away till St Leger's Day.
The 2pc-plus rise over the last week means that we are now up more than 30pc since the market touched a low of 3,512 on March 3.
While the natural bull inside me enjoys watching the market tick higher and higher week after week, even I have to admit that this run is looking increasingly fragile with the FTSE 100 now trading on a price earnings ratio of more than 60, the highest level since 2002.
Yes, stock markets are forward-looking but it's still difficult to reconcile Friday's near 100-point rise with the dire public finance figures published on Thursday. The massive deficit was a timely reminder of how bumpy the road to recovery will be.
Usually a bumper month for corporation and income tax receipts, the Government ran up an £8bn deficit in July, as tax revenues collapsed and benefit payments soared, putting the Chancellor's optimistic Budget predictions at serious risk.
Economists fear that government borrowings could now reach £200bn by the end of the year – some £25bn more than Alistair Darling forecast in April.
As Michael Ben-Gad, deputy head of economics at City University, so eloquently put it on Friday: "Whoever gets into government next will have to make very large cuts in services and also raise taxes. You'll end up with US levels of services and Scandinavian levels of tax."
Not surprisingly even the most bullish are getting nervous. Only last week Crispin Odey – the founding partner of Odey Asset Management who made tens of millions on the way down for clients and then repeated his success on the way up – warned of a pull back.
This rally, I fear, may have run too far.
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