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Fiscal tightening may come later rather than sooner

The big fiscal tightening set to be unveiled by the Chancellor at the Autumn Statement next Thursday is coming just as the recession begins. The clear risk is that the fiscal consolidation deepens the recession, although that may just mean interest rates won’t need to rise quite as far to bring inflation back down to the 2% target. Much depends on the composition and timing of the fiscal tightening announced next Thursday.

We’ll be discussing the implications for the economy and the financial markets of the Autumn Statement in a 20-minute online briefing at 4pm GMT on 17th November. (Register here.)

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