Northern Rocky

This may be dry, but ... the Treasury has already made up its mind that nationalising Northern Rock will "definitely" not break Gordon's fiscal rule that public sector debt must not rise above 40 per cent of GDP. Huzzah!

Here are the figures: currently debt is at 38 per cent, and the ONS must decide whether the £100 billion extra liabilities from a nationalisation, about 7 per cent of GDP, will be classified on or off the Government's balance sheet. But an official said that regardless of the ONS ruling, the Treasury judges whether this busts Gordon's rule. And they have already decided it does not. Problem solved!

They argue that any nationalisation would only be temporary: "We feel (that this debt) is of a sufficiently distinctive nature because it is only temporary and not related to tax or spending policy and that it would be off the books pretty quickly." The Government insists that Northern Rock's liabilities are backed by solid assets (people's houses), but technical accounting rules mean that these assets cannot be taken into account on the balance sheet.

£55 billion of this debt, the loans from the Bank of England and the Treasury, is already likely to be included on the government balance sheet imminently, lifting debt to 42 per cent. Or, as George Osborne calls it, "more than the schools budget".

For more, this is an handy introduction by Robert Peston