Alistair Darling is playing a dangerous game. Just how dangerous a game was made clear yesterday in the way investors in bonds issued by his Government reacted to his pre-Budget report.

Despite all the fine words about taking action to cut the public sector deficit at some point, they didn't believe him. There is a growing feeling that a cut to Britain's prized triple-A credit rating is all but inevitable, with all the damage that goes with it in terms of the dramatically increased cost of financing all that debt.

And it does appear that quietly, behind the scenes, work is being done to rein in spending. The Government just doesn't want to talk about it. That could be a mistake.

The public is aware that there will have to be spending cuts, and deep ones, sooner or later. They didn't believe Gordon Brown when – despite all the evidence to the contrary – he said he would plough on, spraying millions here and there with wild abandon.

And they don't believe Mr Darling's scarcely less credible tactic of doing not very much. Saying "something must be done, just not yet, and we won't tell give you any idea of where the cuts will be made until after the election" just makes him look cynical.

He doesn't appear to realise that there might just be an appetite among the public for a bit of honesty from a politician after the venality and cynicism of the past couple of years.

But it's worse than that. Mr Darling's impression of the three wise monkeys sends a message to investors. It doesn't matter that his colleagues might be quietly taking action under the radar.

It doesn't matter that he might very well have a very good idea of what needs to be done if a political earthquake sees him back in No 11 after the election. Investors usually make their decisions based on the prevailing sentiment now. And that sentiment is bad. It might not even need the faceless men in the ratings agencies to decide that the time for the stroke of a pen that turns AAA into AA+ is now. Markets will act on what they expect those men to do, not to what Mr Darling says he might do.

In a sense the markets look like they will take the decision for the ratings agency. They will price our debt as if it has been downgraded regardless of when it happens.