Pessimism, Politics and Economics: the real Budget story

Published on by

Public Finances and the Economy

Debates following this week’s Budget have been dominated by political arguments about whether the Chancellor’s spending splurge means that austerity had been ended or lives on (our view: austerity was significantly eased but not ended). But another debate has been conspicuously absent this week, having dominated the UK’s political economy for the past eight years: … Continued

READ MORE

The Budget marks a very significant easing – but not an end of austerity

Published on by

Public Finances and the Economy

Marriages require compromise. So we shouldn’t be surprised that the reluctant political marriage between Theresa May and Phillip Hammond has delivered a compromise Budget. Caught between the Prime Ministers promise to “end austerity”, the wish to see debt falling, and the reality of the parliamentary arithmetic making significant tax rises difficult the Chancellor has taken … Continued

READ MORE

The Chancellor may have one arm tied behind his back, but there are still tax levers he can pull

Published on by

Public Finances and the Economy, Tax and Welfare

How can a government with a tenuous majority, an intra-party feud and Brexit uncertainty find the money to ‘end austerity’ on top of more than £20 billion a year it has promised for the NHS? The safe bet is that it won’t find anywhere near all of it in the Budget. This can – like … Continued

READ MORE

The OBR on Brexit: known-unknowns and unknown-unknowns cast shadow over the Budget

Published on by

Public Finances and the Economy

As if Philip Hammond’s job over the next few weeks wasn’t tough enough already, the Office for Budget Responsibility (OBR) this morning has published its thinking on how Brexit will make his life harder for many years to come. Already charged with “ending austerity” (which, as Torsten pointed out last week, is a stretch to … Continued

READ MORE