Having set up the Office for Budget Responsibility to lend credibility to Treasury economic predictions, George Osborne was faced with the grim task of reading out its current forecasts: borrowing will rise, more cuts will need to be found, and plans to eliminate the structural part of the deficit will miss the target of the end of this parliament. For Ed Balls, it was a clear admission that government economic policy is failing.
But the chancellor did announce a series of business-friendly measures on employment rights alongside a handful of specific infrastructure projects. To help pay for it, he announced a cap of 1% on public sector pay rises for after the current pay-freeze ends. All in all, it was an incendiary approach to public sector workers already planning to strike over pensions this week.
In the studio, economics editor Larry Elliott picks apart the economic messages from the chancellor, while columnist Jackie Ashley dissects the politics of the occasion. Polls show Labour trailing the coalition on the question of trust over the economy. But Ed Balls was judged - in this studio at least - as the day's clear political winner.
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