Bronwyn Curtis, head of global research for HSBC The Government’s growth forecasts are much more optimistic than expected, forseeing healthy economic growth by 2010. The Prebudget report even shows GDP growth returning to trend of 2.75 per cent or more by 2011. The worrying thing is that even as the Goverment expects growth to pick up, it will still be borrowing huge amounts. This means that it must be expecting tax receipts to be markedly lower, meaning it has to plug the hole with borrowing. Our conclusion is that the Government is expecting a lower tax take from the housing sector and the City – which does not bode well for the recovery of these two areas. The big black hole in the Government’s finances is set to be much bigger than anyone thought.

Martin Weale, director of the National Institute of Economic and Social Research Mr Darling’s report is, in the short-term, more realistic than some of his earlier pronouncements. What he has to say on government borrowing next year is reasonable, for the first time in years. But he will probably be disappointed by the impact of the budget on the economy next year. National Institute estimates suggest it will offset the fall in output by only about 0.3 per cent, leaving a decline in output at best at the bottom of his budget range. He may have set himself up for opposition politicians to say that a great deal of money has been spent to rather little effect. And if the financial squeeze continues to worsen, then the outcome could be appreciably worse than these figures suggest.

Geoffrey Dicks, chief UK economist for Royal Bank of Scotland The centrepiece of the PBR is a 2.5 percentage point reduction in VAT, designed to support consumer spending and limit the length and depth of the recession. The gamble requires the cut to be passed on to consumers who then react positively to lower prices. The first part is more or less a given since retailers are already competing aggressively on price. The second is less certain. It relies on our willingness to spend and not put the money aside for higher taxes down the line. Given the myopia of the British consumer, some boost to spending will be forthcoming, though it will not prevent a deep recession. That can only be avoided if our main trading partners follow us with significant fiscal expansions of their own.

Darling's £1 trillion debt gamble

Alistair Darling stored up big tax rises for the better-paid and huge public spending curbs in his fight against recession. Watch video

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