Who’d have thought the Treasury’s ‘Ways and Means’ facility at the Bank of England could cause so much excitement? The two parties have agreed a temporary extension of what is, in effect, the government’s overdraft account with the central bank. Cue great delight from advocates of printing money to pay for higher public spending, such … Continue reading No, the government still hasn’t found a ‘magic money tree’!
Category: Fiscal Policy
Don’t shoot the rating agencies!
On Friday (27th March), the credit rating agency Fitch downgraded the UK’s sovereign credit rating by one notch, from AA to AA-, citing worries about the economy and a jump in government debt. Bond investors at least are shrugging this off. But the announcement has revived long-standing concerns about the role of rating agencies during … Continue reading Don’t shoot the rating agencies!
Coronavirus crisis doesn’t mean Corbyn was right
Given how trendy it is to blame ‘capitalism’ for all the world’s other ills, from wars to climate change, it’s no surprise that some have been quick to pin the current crisis on the failures of free markets too. Many have also used the need for unprecedented government intervention as evidence that the state should … Continue reading Coronavirus crisis doesn’t mean Corbyn was right
‘Intervention is essential, but does not signal a socialist state’
The coronavirus job retention scheme is the biggest step the Chancellor has taken so far, both in terms of its nature (subsidising the wages of millions of private sector worker) and cost (potentially many tens of billions of pounds). This raises three questions. Is this degree of state intervention justified? What more is needed? And … Continue reading ‘Intervention is essential, but does not signal a socialist state’
