JUST how dark can things get?

We were meant to have come out of recession a couple of years ago, but the recovery of the economy since then has been very fragile. Yes, there is growth, but, at 0.9%, it is much slower than was anticipated at the time of the last Budget.

The Office for Budget Responsibility (OBR) is still forecasting that, in four or five years’ time the UK will be enjoying growth rates of circa 3%. If those growth rates come to pass, then, by 2015, we will all have put these dark days behind us. In the meantime, however, the OBR made it plain that the recovery will be painfully slow.

One key feature of yesterday’s Autumn Statement is the degree to which the Chancellor appeared to be deliberately stoking up a fight with the public sector, particularly given that today is the TUC’s Day of Action.

Put it this way. If Mr Osborne wanted to pick a fight, then his words yesterday would make a good way of going about it.

But now would be exactly the wrong time to get into a protracted series of disputes with a large proportion of the population. Earlier this week, Dave Prentis, general secretary of Unison, warned that a series of strikes “region by region, service by service” could be the next weapon used by unions over public sector pensions. A long series of strikes could hurt economic output every bit as much as the eurozone crisis.

Then there was the announcement in yesterday’s Autumn Statement that the Government wants to carry out regional reviews of local labour market conditions.

The Conservatives have long held the view that national wage bargaining in the public sector distorts rates of pay in less prosperous regions. The belief is that pay rates needed to recruit workers in London should not necessarily apply in the North West, for example. Also, relatively high levels of public sector pay mean that private sector firms have to incur higher costs to compete for staff.

However, any move to significantly cut public sector pay could be seen as damaging in places like Liverpool, where the public sector represents a large proportion of the local economy.

Mr Osborne’s speech appears to have satisfied the markets. The price of British government bonds rose slightly, suggesting that financial investors regard this country as good for its debts. The stock market hardly budged at all, principally because investors had already factored the bad news about economic growth rates into share prices.

The fact that the world’s markets are treating Britain with a degree of equanimity will allow Mr Osborne to feel justified about his actions. Britain’s credit rating does seem to be his principal concern. Perhaps he’s right. We have all seen what a casual disregard for bond market opinion has done for political leaders in Greece and Italy.

But there was one huge piece of news contained in the press releases published alongside the Autumn Statement, but which itself was not announced in Parliament. The OBR’s estimate for the number of public sector job losses arising from the austerity measures has risen from 400,000 at the time of the last Budget to more than 700,000 now. That’s a startling increase and represents the price some people will have to pay for the nation’s slow economic recovery.

These cuts will hurt every aspect of life, from health and education through to social care.

It was a grim speech that offered little by way of hope.