A do nothing, blame everyone else Budget Admittedly, the Chancellor managed to find some money to fund more infrastructure spending. This was a good thing. But it was paid for by cutting current spending. He trumpeted the extra spending as contributing to growth - and so it might eventually. But in the short term, the country is suffering from a chronic lack of demand. Overall, this package will have no effect on demand. Meanwhile, in these difficult times it apparently remains sacrosanct that we give away 0.7pc of our GDP per annum in overseas aid. This is beyond me. Still, if our economy shrinks again, one possible consolation is that the amount of pounds given away will fall as well. With fiscal policy apparently so constrained, the Chancellor is clinging to the hope that monetary policy will come to the rescue. Yet the changes he announced to the monetary policy remit don't match the ambition. More blurb from the Bank about the trade-offs that it faces is hardly world-changing stuff. He, and umpteen others, seems to have fallen for the Carney Cult. Belief in the magical powers of someone else is what you resort to when you cannot bring yourself to undertake tough measures yourself. Then there were the measures to boost home ownership. This continues to be one of the worst features of post-war British policy. Housing is not the key to prosperity. And however important it is, what is needed is a stimulus to supply, not increases to demand. We can no more get rich by buying and selling each other's houses than by each agreeing to take in each other's washing. Increasing the demand will only raise prices further. The Chancellor was clutching at straws when he insisted that record low interest rates is one of the Government's major achievements. All governments in the West share this achievement. Moreover, by interest rates he means different things at different times. When it suits him, he wants the term to mean short-term interest rates, which directly affect mortgage rates. At other times he means long-term bond rates. But short-term rates are at record lows because the Bank of England chooses to set them there. It makes this choice because the economy is so utterly desperate. They will surely stay at record lows regardless of whether the Chancellor decides to borrow another few billion a year. Bond yields are at record lows partly because short rates are at record lows and will be staying there, but partly also because the markets regard the UK government bond market as one of the least bad options. If the market increased UK bond yields from 2pc to 3pc this would have no bearing whatsoever on household finances or the finances of most firms. And it is highly unlikely in my view that a well-judged package of expansionary measures would lead to this result. Of course you could not be sure. But then you never can. And if markets did take an adverse view then it would be possible to instruct the Bank to buy more gilts. Whether you support this policy or not, it is a real alternative. It has been spurned for very bad reasons. It is striking that senior Treasury civil servants who have never held a bond, let alone traded one, seem so sure of what the bond market reaction would be, whereas so many people I speak to who make their living in the markets believe that the Treasury could be more expansionary without much fear of an adverse response. If I am wrong and the economy leaps forward over the next year, then I will freely admit my error. Indeed I would rejoice. But I have a horrible feeling that in a year's time it will be more of the same. Somehow, though, I cannot quite imagine this Chancellor standing there and saying yet again that this is the only way. Roger Bootle is managing director of Capital Economics