UK Fiscal Policy: More Letters

This FT article reports on two letters it publishes today (the article provides links to the letters) which argue against a more aggressive approach to fiscal consolidation.

3 replies on “UK Fiscal Policy: More Letters”

The conclusion of the FT editorial was interesting, in my view.

“Friday’s letters are an embarrassment for the Tories, above all, who sought to capitalise on the first letter. They must learn – soon – that their desire for simple political messages is no excuse for nuance-free policy positions”.

Also in the editorial, the point was made that gilt yields immeditely rose when monthly tax returns undershot consensus estimates. Perhaps the general lesson is that bond investors are looking closely at tax returns, and give a thumbs up to those economies where tax revenues are reviving, and a thumbs down where they continue to decline.

Gavyn Davies, who has some form in this area, provides an interesting overview in today’s UK Guardian:

It prompts two observations. First, this battle is being engaged via letters to the editors of broadsheets – the utlimate confirmation of impotence – and parliament has no means of assessing and forming a settled position on these divergent opinions that have such a major bearing on future fiscal and economic policy and, then, of imposing its will on government.

Secondly, as in the dog that didn’t bark and as further proof of the impotence of parliament in Ireland – and in the context of, possibly, deeper crises, there is considerably less decision-informing debate in Ireland.

The debate on this site, such as it, seems to be – and probably never could be more than – an academic parlour game that the great unwashed are privileged to observe – and on which they are gracefully permitted to comment.

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