There are two kinds of U-turn. The first is the U-turn that reflects well on those who do the turning. Changing one's mind is hard, after all, and to be able to switch position can demonstrate a welcome flexibility. Then there is the other sort of U-turn. This is the shift that is primarily notable for the stupidity of the position originally adopted. The change is not brave, but merely an acceptance of reality that is long overdue.

The Government is currently engaged in a U-turn that definitely belongs in this second category. It is undertaking this manoeuvre gingerly, understanding exactly how it looks, but undertaking it the Government most certainly is. It is abandoning its forecast that the recession will be over in the middle of this year.

In his forecast made only in November, the Chancellor of the Exchequer predicted that growth would start again in the middle of this year. If this were so, the economy would now be at the mid-point of the recession. Realising that such a contention is incredible, the Chancellor and the Prime Minister have both begun talking of the hard year ahead. According to Alistair Darling, “we are far from through this”. A formal revision of the forecasts will surely follow.

There are three ways of interpreting this incident. The first is that this was mere incompetence. The moment that the figures were announced by the Chancellor, it was obvious to most intelligent lay observers that they were incredibly optimistic. Mr Darling says that his forecast was the best that could be made “based on the evidence at the time”. This is not the most convincing point he has made in his political career. The “at the time” to which he refers is only a few weeks ago.

Nor was it the first occasion that such an obvious error had been made by Mr Darling. November's forecasts were lower than the same forecasts made in the Budget in 2008. And those forecasts, too, had been plainly over-optimistic.

The Chancellor is advised on such matters by technicians in the Treasury. The department should consider why it gave such poor advice and how to improve its techniques. However, it is the job of ministers to subject such technical work to harsh scrutiny. The kindest interpretation of events is that this scrutiny was absent.

The second, and less kind interpretation, is that a degree of cynicism was involved. In order to be able to announce the VAT cut and therefore be seen to be “doing something”, the Government needed both the markets and political opinion to accept that it was acting responsibly. To win over this support, it had to show that borrowing would be brought under control rapidly. This gave the forecasts political importance.

The more optimistic the prediction that the Government made, the lower its borrowing would appear and the more rapidly there might be a return to sanity. There was thus a real incentive for the Chancellor not to challenge Treasury figures, even if he thought them too rosy. If it was a political calculation, however, it was a remarkably short-sighted one. It may have helped on the day of the announcement, but was bound to be exposed quite quickly.

There is, therefore, a third explanation for Mr Darling's error. It is that he genuinely believed that his fiscal measures, in particular the VAT cut, would make a big impact on economic activity. If he now acknowledges that the measures have not worked as he hoped, and therefore that he spent more than £10 billion on a failure, then his new forecasts would be a statement of defeat.

So incompetence, cynicism or an admission of failure. One of these? No. All three.