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Outlook: Don't spend it all at once, Mr Brown

THE UK economy is changing out of all recognition. The Great Britain we all know and love is a high-inflation, high-unemployment nation, with a burgeoning budget deficit that doesn't go away, even in the good times. Over the past year or two, however, the economy has started to look disconcertingly different.

Inflation has been more or less at the Government's target for many months now. Employment is at a record high. And the public finances -- as the latest set of figures show only too clearly - are in amazingly good shape. The Government's budget surplus hit a monthly record in January, leading some economists to predict a surplus for the year of more than pounds 10bn. This is more than double the level forecast by the Treasury back in November, and leaves Gordon Brown looking exceedingly comfortable going into next month's Budget.

Or does it? The UK's budget surplus is a notoriously unpredictable beast. As the difference between two staggeringly large numbers - total government receipts and total government expenditure - the series is prone to substantial fluctuations from month to month. It is also highly sensitive to cyclical variations. Even a small downturn in economic growth, which reduces income tax receipts and boosts spending on unemployment benefit, can leave a large hole in the Government's numbers.

Mr Brown's success with the public finances so far is a mixture of good management, good luck and good timing. Although the Chancellor deserves to be congratulated for keeping tight control of the public purse, and for his bold move to grant the Bank of England independence, he has received a helping hand from unexpected quarters.

No one predicted, for example, the positive impact self-assessment would have on tax receipts. Timing has also been on the Chancellor's side. The economy reached its growth peak in 1998 - it's all downhill from here.

This all means Mr Brown should approach yesterday's public finance figures with care, and resist the temptation to loosen the purse strings too far in the Budget. The British economy is doing surprisingly well. It would be a terrible shame to put it in jeopardy.