Tax and Fiscal Policy

Austerity may be an unnecessary risk as the UK enters recession

Julian Jessop writes in The Independent

IEA Economics Fellow Julian Jessop has written in The Independent warning Jeremy Hunt against embracing austerity in Friday’s autumn budget.

Julian wrote:

“The bad news is that there will also be around £25bn of tax increases and £35bn in spending cuts in order to plug a £60 billion “black hole” in the public finances. 

“In my view, Jeremy Hunt is taking an unnecessary risk here. The £60bn estimate for the “black hole” is really just guesswork. It is based on five-year forecasts for growth and inflation which we know will be wrong.

“my fear is that the pendulum is swinging too far from the pro-growth plans of Truss and Kwarteng, back to self-defeating orthodoxy and austerity, at a time when the economy needs all the support it can get.”

You can read Julian’s article in full here.