There was little right about the UK Budget last Wednesday, but much that was wrong.

Chancellor of the Exchequer, Alistair Darling’s Budget speech supposed the economy would power back to higher than trend growth within a year or two, following an underestimated slump of -3.5pc this year. GDP will apparently oblige by growing at a boomtime rate of 3.5pc in 2011 and then ease back to trend at 2.75pc.

The IMF was quick to stamp all over the Budget predictions of growth, while most commentators rubbished the entire exercise as electioneering and “queering” the Tories pitch.

Public borrowing for this year and next is set to rise to £175 billion and £173bn — the highest in history and more than all years added together since 1694.

The Prime Minister and Chancellor clearly don’t believe they will be around to pick up the mess when all this fiction hits the fan.

There was almost a demob-happy mood in the PM’s demeanour as he laughed and chatterered through proceedings.

It does not bode well.

The Bank of England’s decision to start printing money — Quantitative Easing, in the jargon — has had mixed reviews from the press.

The potential inflationary effects are the prime concern. Others take the line that the Bank could do little else to boost the money supply, while a few politicians have pointed out that broad money (M4) is already rising by 20+ percent.

A good primer on the pros and cons is given by the BBC’s Business Editor, Robert Peston on his blog:

Will QE work?

Not to be outdone the BBC’s Economics Editor, Stephanie Flanders, also weighs in with an informative piece on how the Americans are doing it — mainly by buying corporate bonds, not Treasuries:

Ahead of the curve

My favourite is by the Daily Mail’s City Editor, Alex Brummer, who today gives an emphatic thumbs down to the whole operation.

Bank’s great experiment may prove gamble too far

Syntagma also greeted the “new dawn” of lumpen monetarism with incredulity:

Watch out for the mashed potato machine

Food for thought.

Bank of England Deputy Governor, Charles Bean, announced today that a further adjustment on the downside for GDP this year is on the cards. The previous forecast was -4 percent. That now has a 75 percent chance of going lower still.

Bean also confirmed that the Bank is moving towards the most controversial form of “printing money”, buying gilts, or Treasury bonds.

Although the Bank has been tinkering with “quantitative easing”, as it’s known, it was not clear whether it would wheel out the big gun of covering government debt.

Charles Bean also indicated that further cuts in interest rates are likely, falling from the current level of 1 percent to, presumably, the American level of a tiny squeak above zero.

He was said to be relaxed about the fall in sterling and an additional tweaking of rates lower, indicating that the falling pound is not high on the alarm agenda right now.

The BoE believes a further rate cut is necessary before it can begin full-scale quantitative easing.

The International Monetary Fund (IMF) is forecasting that British GDP will contract 2.8 percent this year, worse than the U.S., the eurozone and Japan.

The IMF expects the U.S. economy to contract 1.6 percent; Japan to shrink 2.6 percent and the eurozone to decline 2 percent. Overall, the IMF expects the global economy to expand 0.5 percent, its weakest showing since the Second World War.

Economists at the IMF also estimated that bank losses may reach $2.2 trillion, almost twice the $1.4 trillion the organization predicted in October.

It warned that, “unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth.”

In Britain, the bank bail-out is already projected to take national debt to 8 percent of GDP, and today the Institute Fiscal Studies warned that national debt levels are unlikely to return to the pre-crisis levels for more than 20 years.