You are broke, same as USA only without the ability to print money.
UK external trade deficit runs at about 4 billion a month, even in 2007 before this latest problem. Euro zone ran a surplus 28 billion Euros in 2007 for reference.
UK biggest export is services, including financial services, the sector in collapse so the external deficit will increase. It runs a huge deficit on manufactured goods. i.e. I'm predicting ever worsening UK trade deficits.
UK continues to raise barriers to Europe and the rest of the world. UK economy is propped up by selling bonds to China. i.e. perceived wealth is really borrowed money from China that's been invested in UK property. Increases in property prices is paper growth not real growth, so your ability to pay it back is not there.
Put it this way, supposed you started spending, and inflated the property prices further, selling each other 'house makeovers' or whatever it is your economy did. Who would you sell these properties to at that inflated price? That inflated property cannot be exported.
IT services can still be exported, but I left and so should you, there is a better life to be had abroad and they have money and UK has Jacqui.
China and the exporting nations will not accept payment in Sterling for goods because they cannot use that currency to do anything with it. They do not need sterling to buy financial services now, because that market has died. They do not need sterling to buy British manufactured goods because your manufacturing industry has gone. They will not not want sterling bonds because the likelihood of growth for an isolated economy are slim. They cannot even visit the UK now because it's become fortress Britain, so they couldn't even spent sterling as tourism money!
So Brown really does not want to stimulate the consumer to buy because that would suck in imports and make the balance of payments worse. He should be doing the opposite to reduce the trade balance. If he does that, then he has to call an election before the pound falls and inflation hits.
So Q2 2009 I reckon is the latest he can call an election. He's gambling on the consumer feeling good, buying more, the growth figures would look better. He calls an election, he hopes he gets elected again, then the next balance of payments quarterly figures look real bad, the pound drops, all hell breaks loose but *after* the election.
He can't leave it to late in 2009 to call the election then.
The stimulation of business is one thing (good IMHO), but the VAT decrease is the last thing that's needed. When the woman was asked on TV what she'd spend the extra on, she says "great I'll go fill the fridge" she doesn't understand there is no VAT on food. Likewise when she said she'd go buy clothes and shoes for her kids, there is not VAT on childrens clothes. The VAT decrease helps her buy a TV from China, not food from Aldi!
So to sum up,
2009 will see the pound fall, inflation rising, job losses increase, hefty tax rises and higher yield gov bonds. Brown will seek to time the election to before the numbers come out.