When Britain’s coalition government announced its plan for aggressive fiscal consolidation on taking office in May 2010, three key arguments were advanced by its supporters.

The first was that there was no alternative: if borrowing continued on its current track, the gilts market would panic. In its extreme form, this was always scaremongering. But it has been disproved by events even more thoroughly than most of us expected. We are now on course to borrow even more than was planned before the austerity programme was announced. Yet long-term interest rates in Britain are at historic lows just as they are in virtually every industrialised country with monetary independence. This is the result of low growth, not fiscal consolidation.

The second argument was that fiscal consolidation would help, or at least not derail, recovery. Again, this relied more on faith than economics. While we shouldn’t read too much into last week’s output figures, the UK economy is hardly thriving. Its weakness is in large part the result of fiscal policy – the International Monetary Fund estimates that this has reduced gross domestic product by about 2.5 per cent so far.