With Alistair Darling’s pre-budget report on Wednesday this week, we were all reminded of the sobering state of the economy. What were the most important new measures he announced? Capping of public sector pay rises to 1%? An increase of the state pension by 2.5%? As the spidery fingers of government dance across their economic levers, tweaking and caressing, attempting to nurture the economy back to life, let us reflect on a factor that are of real value: the length of the Chancellor’s budget speech. Wednesday’s pre-budget report came in at 45 minutes, with the 2010 budget around the corner, should we be hoping for a lengthy diatribe or a swift jog through the chancellor’s kingdom? The chart below shows the length of time in minutes of budget speeches on the right hand axis, and the year on year change in UK GDP on the left hand axis between 1990 and 2008. budget graph.JPG At first glance, there appears to be some similarity in the lines, with peaks and troughs reflecting each other, albeit with a time delay between a change in the speech length appearing in the GDP line. The longest budget speech in the period shown was Norman Lamont’s in 1993(i) at 113 minutes, and it seems to anticipate the economic peak of growth that followed in 1994. The local maximum of Brown’s speech in 1999 comes again just one year before the economic peak in 2000. So, back to our original question: what should we be hoping for from Alistair Darling’s budget next year? Here, we are trying to understand whether the estimated 5.1% contraction in the economy(ii) for 2009 is the bottom of the curve or not. If Darling delivers a speech longer than 52 minutes in the New Year, it will show a distinct upward trend, rising from the trough marked by the 51 minute speech given by Gordon Brown in 2007. However, if the speech is short – 52 minutes or fewer, it may indicate that the trough is yet to come, and we’re in for further turbulent times. The longest Budget speech was 4 hours 45 minutes by Gladstone in 1853, and the shortest was Benjamin Disraeli’s 1867 speech which took just 45 minutes. Other interesting budget trivia: Derick Heathcoat-Amory collapsed in 1960 while delivering a Budget. But he was responsible for one of the best Budget one-liners: “There are three things not worth running for – a bus, a woman or a new economic panacea. If you wait a bit, another one will come along.” If you’re not satisfied with having to wait for the next budget to feel sure about the economic future of the country, here are a couple of other indicators to be on the look out for. Hemline/Skirt Length Indicator: This theory suggests that the direction of the economy can be predicted based upon the average length of hems in that year’s new fashion lines. If skirts are short, markets are on the rise. Conversely, if skirts are long, markets are heading down.(iii) In uncertain times, people tend to prefer songs that are longer, slower, with more meaningful themes. It’s all about Bridge Over Troubled Water, and That’s What Friends Are For. In better times, it’s more likely to be faster, upbeat songs like At the Hop or My Sharona.(iv) Ah, I knew there had to be an explanation for the popularity of Cheryl Cole’s Fight for this Love! —————————– (i)There were two budget speeches in 1993 Lamont’s in March and Clarke’s in November. (ii)http://www.statistics.gov.uk/cci/nugget.asp?id=192 (iii)www.telegraph.co.uk (iv)www.nytimes.com