Further out, the Chancellor has announced plans to increase corporation tax, bringing in some £17.2bn. If he were to rescind either or both of these two planned tax increases then, in the short run at least, government borrowing would be correspondingly higher. 

The Chancellor has laid out a new fiscal framework built upon new fiscal rules. The main one is that underlying public sector net debt as a percentage of GDP should be falling by the third year of the forecast period – “in normal times”. 

The OBR reckoned that the Chancellor probably had a margin of about £17bn before breaking his fiscal rule and I suspect that the margin was a good deal higher. That gives him a bit of leeway, especially since the rule only bites in three years’ time, and the target is constantly being rolled forward. 

Yet, given the pressures outlined above, the Chancellor could find himself breaking his fiscal rule. So what to do then? Fiscal policy is always a balancing act. He needs to be flexible.

Chancellors cannot live by fiscal rules alone. These are not “normal times” – or at least we hope they aren’t. And the requirement that net debt should be falling by the third year is anyway entirely arbitrary.

Even though the current and forecast borrowing levels look appallingly high, there is scope to let them rise a bit more in the short term, provided that there are good reasons to expect them to fall later. 

At 95pc of GDP on the headline measure and 82pc on the underlying measure, the debt burden is undoubtedly high, but not extraordinarily so. In comparison with both our own history and contemporary debt burdens in other countries, this level is not cause for panic. 

But this does not mean that fundamental policy changes are unnecessary. It won’t come easily to the Prime Minister and his acolytes, but the Chancellor needs to look again at planned increases in government spending. 

In the last Budget he announced massive real terms increases in the spending of just about every government department. At the time this looked rash. Surely, it looks even more so now. 

It is always uncomfortable to undo a policy only recently adopted but circumstances now are radically different from how they were even six months ago. When the facts change this much then policy needs to change radically too. 

Roger Bootle is chairman of Capital Economics
roger.bootle@capitaleconomics.com