Breakingviews

UK’s economic torpor looks structural

By Edward Hadas
December 4, 2014

The slow shrinkage of the UK fiscal deficit is one sign of a weak recovery. There are others – a sharp increase in the current account deficit and GDP per person below the 2007 level. The country’s problems are too deeply entrenched to be solved by government budget tinkering.

Cameron takes deficit amnesia to a new level

October 1, 2014

The UK prime minister crowed when opposition leader Ed Miliband forgot the deficit in a keynote speech. Yet David Cameron has gone further, insisting on the need to tackle the country’s biggest problem and then pledging a tax giveaway. It’s an electoral bribe he can’t afford.

Weakening UK growth creates tax cut Catch-22

September 7, 2011

The UK chancellor faces a Catch-22. While tax cuts would help growth, weak growth means deficit reduction already looks behind schedule. The government needs all the revenue it can muster.

Donor row saps UK government’s austerity authority

March 27, 2012

After a pro-business budget, the “Cash for Cameron” affair has raised concrete concerns that the Conservative-led coalition can be bought by anyone with a fat chequebook. The government’s ability to get the country to swallow ongoing deficit reduction can only be undermined.

Osborne should take King’s naughty fiscal gift

September 21, 2012

Mervyn King is at it again. The BoE governor made his support for the government’s austerity drive too plain and now is giving the Treasury excuses to miss its debt target. Chancellor George Osborne should accept the gift. Euro crisis helps the case for looser not tighter policy.

UK policy rhetoric flies in the face of reality

By Edward Hadas
March 7, 2013

The British government says it believes in fiscal conservatism but runs one of the largest deficits in Europe. It also says it wants a more aggressive central bank, but the BoE is already a global leader in money printing. The unrealistic rhetoric muddies the policy debate.

UK would gain from homeowner tax switch

March 8, 2013

Homeowners are a tempting target for cash-strapped UK tax collectors. One option is to levy “mansion taxes”; another is to milk existing stamp duties. It would be better to forget the first, scrap the second and close the capital gains tax loophole on residential property.

UK cannot afford a budget giveaway

March 19, 2013

George Osborne is public enemy number one. Critics want him to reverse austerity. He would do better to reinforce it in health and education. But that’s a political no go. The best he can do is provide a mini stimulus via more housebuilding and tax cuts for the low paid.

Don’t bet on RBS good bank/bad bank split

June 20, 2013

The UK chancellor will examine the idea of hiving off the state-held lender’s ropey assets. Doing so without more public money or further slowing RBS’s privatisation will be difficult. Fortunately it looks more a sop to bad bank advocates than a genuine statement of intent.

UK budget must deliver homes not bubbles

November 28, 2013

George Osborne can boast that the UK economy is growing and the deficit is diminishing. But the recovery is too typically reliant on house price inflation. The chancellor’s budget update should aim for radical change: getting finance to work for house building, not house bubbles.