What is Gordon up to? To the layman this latest economic wheeze is very confusing. He is jumping on his economic cycle and heading off in search of some new golden rules. Or something.

As Chancellor, Mr Brown set two supposedly inviolable rules to run the public finances. Rule No 1 was the so-called golden rule: borrow only to invest – in roads, school buildings, warships and the like. Rule No 2: limit public debt (the amount that Britain owes the world’s financial markets) to a sustainable level over the economic cycle. Mr Brown decided that such a level should be no more than 40 per cent of our gross domestic product, the value of all goods and services that we produce in a year.

Alistair Darling is now looking at busting that limit. His income is down: taxes from house sales, company profits and City bonuses are all well below what he budgeted for. There are three ways out, two of which are political suicide: higher taxes or cutting spending on stuff that voters care about. The easiest option is to borrow more, but that means breaking the 40 per cent rule. Which is why Mr Darling’s officials are rewriting the rule.

He is preparing to defend the move by saying: “Hey, look, we’re in a whole new economic cycle, and the old rules were for the old one.” But is it? And what is an economic cycle anyway? Output goes up and down as demand for the apples we pick and the widgets we make fluctuates. Broadly, a cycle starts and ends where output grows above the long-term average of growth.

The tricky thing is pinpointing when this happens. Some economists think that the cycle might have ended as long ago as 2006. The Government seems to think that it ended in March. Others are not sure if it has ended at all.

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