Brightening outlook reduces the need for tax hikes

With the positive news on COVID-19 vaccines brightening the economic outlook, we now think that by the middle of the decade the economy won’t be much smaller than if the COVID-19 crisis had never happened. Admittedly, there are two big risks, namely the possibility of an “uncooperative” no deal Brexit and a substantial early fiscal tightening. But provided the politicians don’t mess it up, we think that the economy should do better than most think. Webinar Invite: The European outlook – From lockdowns to vaccines Thursday, 3 December Chief Europe Economist Andrew Kenningham will lead this special briefing with colleagues Jessica Hinds, Jack Allen-Reynolds and David Oxley to discuss Europe’s economy under lockdown. The team will preview the ECB’s December meeting, assess Sweden’s attempts to control the pandemic, and look ahead to the potential economic impact of vaccines in 2021. Complimentary registration here.