It is always good to begin with some ‘good news’. The UK government recorded an unexpectedly large budget surplus in January, with revenues exceeding spending by £5.4 billion. This was £5.0 billion better than forecast by the Office for Budget Responsibility (OBR). It would be daft to focus on just one month’s figures, but this … Continue reading Latest misses show the danger of relying too much on OBR forecasts
Tag: fiscal rules
The cycle will always be with us
Mark Twain is alleged to have read a newspaper account of his own passing and declared ‘the reports of my death have been greatly exaggerated’. That story may well be apocryphal. But it has stood the test of time rather better than Gordon Brown’s now infamous claim as Chancellor that there would never be a … Continue reading The cycle will always be with us
Sunak must keep trying to cut tax before the next election
The Treasury’s “fiscal rules” are rather like New Year’s resolutions: many of us make them, but few keep them. Nonetheless, after the spending binge during the pandemic, the Government needs some sort of framework to bring borrowing back under control. We may not have to wait much longer. The Chancellor is expected to unveil new … Continue reading Sunak must keep trying to cut tax before the next election
What should we do with the fiscal rules?
This may sound like heresy to many economists, not least my former colleagues at the Treasury, but I’m coming around to the view that fiscal rules are overrated. Of course, fiscal credibility is important and must be protected. But fiscal rules are often more of a hindrance than a help. For a start, rules on … Continue reading What should we do with the fiscal rules?
Plain-speaking Economics 