MW : The good and bad news -- it's all going to plan
That is what can be made out from the statistics on the U.K. economy released Thursday.
Retail sales are up in July, and mortgage lending is up 26% from June levels.
So, the unprecedented efforts to save the economy with ultra-low interest rates, government bank bailouts and various stimulus efforts are working, to a degree at least. See full story.
But it's coming at a cost -- the government's finances are getting worse and worse.
The government on a net basis borrowed 8 billion pounds ($13.2 billion) last month (it actually had a surplus of 5.2 billion pounds in July 2008), so the net debt-to-GDP level surged to 56.8% from 43.5%.
Looking at the data, the deficit is more about a slump in tax receipts than spending increases.
On a three-month-to-three-month basis, receipts are down 20% but expenditure is up 11%.
However, the deficit data so far excludes the support given to the Royal Bank of Scotland and Lloyds Banking Group. (The statistics office said they will incorporate this data as soon as they can but it may "take some time" because of their complexity.)
Even assuming that the government is able to successfully dump their RBS and Lloyds stakes at reasonable prices, there would be need to be one whale of an economic recovery for the budget to get back to normal anytime soon.
And the Bank of England's top brass don't believe that for a second, judging by the minutes released from the last meeting on Wednesday.
The other day, U.K. disposal experts safely detonated a World War II bomb found in Kent -- showing that not all ticking bombs do in fact explode.
