CategoriesBritish ChambersCharity SectorConstructionCyber SecurityEducationFinancial & LegalHealth Wellbeing & LeisureInternational TradeIT InsightsJob VacanciesManufacturingMarketingMember NewsPolicySales & Marketing InsightsSussex ShowcaseTransport & Logistics Sector
ArchiveSeptember 2020August 2020July 2020June 2020May 2020April 2020March 2020February 2020January 2020December 2019November 2019October 2019September 2019August 2019July 2019June 2019May 2019April 2019March 2019February 2019January 2019December 2018November 2018October 2018September 2018August 2018May 2018
The British government, like many others around the world, is running its biggest ever peacetime deficit. Yet it is also raising money from the bond markets more cheaply than ever. Does this mean that there is no longer any need for fiscal discipline? Is there really a magic money tree of the kind that will just keep on giving, and giving? Or, on the other hand, are we just burdening future generations with even more debt, and won’t there be, at some point, an awful day of reckoning?
Rishi Sunak’s latest fiscal statement, delivered on 8th July, brought the total amount disbursed during the Covid crisis to a staggering £190 billion. He is perhaps the only Chancellor of the Exchequer who has spent more in the footnotes to his statement (£33 billion) than he did in the statement itself (£30 billion). When the Institute for Fiscal Studies (IFS) ran its customary slide-rule over the Chancellor’s arithmetic the following day, they forecast a budget deficit for the current fiscal year of around £350 billion.
Indeed, since the crisis blew up in March, the government has been running bigger deficits in a month than it would usually rack up in a year, with its cash requirement coming in at an eye-watering £174 billion in the period from April to June. The shortfalls are now thankfully starting to come down, with June’s cash requirement being a somewhat more modest £47.1 billion.