Rachel Reeves’ first Budget was not all bad (see my response on the day here). For a start, the new fiscal rules, while still flawed, are an improvement on what went before. Balancing day-to-day spending with current tax revenue makes good economic sense, as does tweaking the targeted measure of debt to take more account … Continue reading Five ways in which the Budget could unravel
Category: Everyday Economics
False economies on spending could be just as damaging as tax hikes
So far, the speculation ahead of the Budget on 30 October has focused on the scramble to find tax increases that might not breach Labour’s manifesto commitments, while still having some chance of actually raising some money. This is clearly not going well. Rachel Reeves may end up as the only economist in the country … Continue reading False economies on spending could be just as damaging as tax hikes
Yes to a ‘step increase’ in public investment – but only a small one
Eight prominent economists have written a letter to the Financial Times arguing that the UK needs a ‘step increase’ in public investment in order to boost growth and to fix social and environmental problems. There is clearly something in this, but many risks too. As the writers correctly note, there is an emerging consensus that … Continue reading Yes to a ‘step increase’ in public investment – but only a small one
Bank of England rate cut should be the first of many
The Bank of England’s decision to cut UK interest rates to 5% this week was finely balanced but surely correct. The aim now should be to return rates to a 'neutral' level of around 4% early next year. The obvious starting point is that CPI inflation has now been at or very close to the … Continue reading Bank of England rate cut should be the first of many
