The Chancellor George Osborne no doubt breathed a huge sigh of relief today when his earlier claim that 'the deficit is coming down' held up. But it was eye watering close.

Figures from the Office for National Statistics (see here) show government borrowing falling from £120.9 billion in 2011-12 to £86.2 billion in 2012-13.

But the latter 2012-13 figure was lowered by £28 billion by the Royal Mail pension transfer, and another £6.4 billion through the cash transferred to the Treasury from the Bank of England's Asset Purchase Facility.

Take out these two artificial factors and borrowing for 2012-13 came in at £120.6 billion. OK, that is just lower than the 2011-12 figure, but only just, at just £300 million less, or 0.3% less.

Spring rushed into Berlin at quite a lick through a short break there last weekend with a tree outside our rented apartment going from bare branches to full bloom in a matter of days.

It's been a dismal few weeks for the Chancellor George Osborne, with another ratings agency downgrading the UK's AAA credit rating (despite the Chancellor having made it the centrepiece of his economic policy), the International Monetary Fund urging him to rethink his austerity measures, and figures showing unemployment rising.

But what was most noticeable for me was how the Chancellor's budget measures to stimulate the housing market were already seen to be unravelling, reminiscent of the caravan-pasty tax 'omnishambles' of last year.

In the late 1950s - after her career as a research chemist, and before being elected to Parliament - Baroness Thatcher was a barrister in private practice specializing in tax and patents.

And so the debate over Margaret Thatcher's economic legacy continues.

The debate about the change she created will continue and historians will present their considered views about long-term effects.

What is a fact is that she was prime minister in October 1986 when so called 'Big Bang' occurred; the deregulation of the financial markets operating in the City of London.

It is worth stating that Mrs. Thatcher and her government's desire to deregulate the City of London institutions was borne of a belief that they would be able to operate more competitively against other world centres of finance - most especially New York - which enjoyed much greater freedom.

As many commentators have argued in recent days, this very deregulation set in motion the circumstances that led to the financial crisis more commonly known as the 'Credit Crunch'.

Why do Englishmen drink standing up ?

The recent death of Margaret Thatcher has provided an opportunity for historians to engage in reanalysis of the period leading up to her election as Prime Minister in 1979.

For many the election of Thatcher at the end of the decade heralded an end to what some saw as a dark period of industrial strife and, as many on the right believed, an urgent need for militant unions to be dealt with and for managers in British industry to reassert their authority.

When the TV series Life on Mars, which was set in the early 1970s, first appeared on television one critic commentated that Britain was made to look like it was a different country in which the landscape was characterised by decaying factories and a sense of gloom.

British industry was seen to be in a spiral of decline and none more so than the many once great and proud names of motor manufacturing such as Austin, Morris, Jaguar and Land Rover that were now operating under the brand of British Leyland.

British Leyland which had been formed in 1968 had been intended to herald a new era of mass car production in Britain though financial problems meant that it had to be partly nationalised.

If any company needed urgent reform when Mrs Thatcher took office in May 1979 it was British Leyland which had become infamous for the recent history of industrial conflict and the belief that when cars were actually being produced they weren't terribly good.

Something had to change.

In his recent budget, Chancellor George Osborne unveiled yet another effort to boost infrastructure spending with a planned £3bn extra investment, but only from 2015-16, and with little detail on where that investment would actually go.

The extra money for infrastructure investment would come out of additional current spending cuts. The extra spending was welcome but fell far short of what was needed, and indeed what the Business, Innovation and Skills Secretary Vince Cable had called for before the budget.

There was no extra borrowing at historically low interest rates (as Vince Cable called for) to pay for extra capital spending to kick-start recovery. Cable, remember, had written that the question was whether "should borrow more, at current very low interest rates, in order to finance more capital spending: building of schools and colleges; small road and rail projects; more prudential borrowing by councils for house building. This last is crucial to reviving an area which led economic recovery in the 1930s but is now severely depressed".

On bank holiday Monday the BBC Radio Four Series You and Yours broadcast a programme 'Made in Britain: Does it still make sense to manufacture in the UK?' which made interesting listening.

What listeners will have gleaned from listening to this programme is that whilst much still made in Britain, a great deal of what we consume is made abroad.

What is especially annoying is that even though any goods we buy may have imprimatur - usually a union flag - this does not guarantee that they were entirely produced with British-made components or that British workers were employed in the attendant processes.

Interestingly among the makers of goods there were mixed views on whether there is merit in still manufacturing in this country. It will come as no surprise that some choose to have their goods made abroad, especially in the Far East, where the costs of the components and, of course, labour are far cheaper.

One of the conclusions to the programme was that just because something purports to be British does not automatically mean that it is particularly good as anyone who bought a British Leyland car produced at Longbridge in the 1970s will attest; my dad had two allegros one of which virtually rotted away!

What did emerge, however, was that in this country we still possess incredible ingenuity, creativity and design and engineering expertise. What we cannot compete against are the wage levels that make goods produced in this country much higher than others.

Additionally, what this programme explained was that we import a great deal more than we did in, say the 1970s. The consequence of this is that whilst our exports are cheaper because of the decline in the pound in recent years we need to pay more for the goods and components we import.

Small wonder therefore that our balance of payments look so dreadful and show a deficit of £57.7 billion for last year compared to a deficit of £20 billion in 2011. That this deficit represents 3.7% of GDP is a worry and is the biggest since 1989.

The answer seems deceptively simple; make more goods that we can sell abroad.

This blog develops my earlier reaction to George Osborne's recent Budget.

Admittedly it's a gross over-simplification to compare setting economic policy to making a pizza. But bear with me as it's a useful analogy. In essence, three levels can be identified in both. A pizza is often completed by a scattering of cheese (political rhetoric), which goes on top of the chosen topping (a mix of policies), which in turn is layered onto the base (the underpinning economic framework).

On visiting a restaurant, we often take time to choose our preferred topping. However, as my Italian in-laws often tell me, in practice it's not the topping that makes for a really top-notch pizza, but the quality of the cooking of its base.