• Gordon Brown swapped his annual Santa Claus act for something closer to Robin Hood, taking from the rich oil companies to give to poorer families and pensioners. Sooner or later, however, he will have to play King John and raise taxes more widely if he is to put the public finances back on track.
• Not surprisingly, Mr Brown blamed this year’s economic slowdown on things beyond his control, such as the high oil price and weakness of overseas economies. But this jars with the MPC’s assessment, and my own, that household spending has been partly weighed down by a rising tax-take and other domestic factors. Moreover, it is striking that other economies, such as the US, the euro-zone and Japan, which have also suffered from higher oil prices, have not experienced a comparable slowdown.
• Inevitably, he predicted that the economy would recover next year and beyond. As a result, while annual borrowing will now be £5bn higher in 2007-08, it will return to its previous expected path later in the forecast period. Needless to say, this keeps the Chancellor’s fiscal rules safely intact.
• But Mr Brown’s scenario remains firmly at the optimistic end of the spectrum. His prediction of a strong pick-up in the economy next year and beyond relies on the fact that the recent downturn has been cyclical. But the weakness of productivity growth suggests that longer-lasting forces may be at work. Meanwhile, he continues to rely on a sharp rise in the ratio of tax receipts to GDP.
• Were it not for the various adjustments already made, the Chancellor would be on course to break his own Golden Rule comprehensively. But whether or not the Rule is broken, the big picture remains one of a very dramatic deterioration in the state of the public finances over recent years. Even his own optimistic forecasts see public borrowing of some £26bn in 2008-09, providing little scope for the economy to continue to disappoint.
• Accordingly, I continue to believe that policy action, probably in the form of tax increases, will eventually be required to get government borrowing back down to acceptable levels. The fact that the economic cycle is now not expected to end until 2009 means that Mr Brown can avoid raising taxes while the economy remains so weak, but he cannot put off the inevitable forever.
• Tax hikes or no tax hikes, though, the key point for the economy is that fiscal policy will be much less supportive for growth over the few years than it has been over the last few. That, in turn, points to a combination of relatively sluggish economic activity and low interest rates.

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