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Monetary tightening now, fiscal tightening later

With the planned fiscal squeeze coming after 2024/25, the Autumn Statement was not just good politics, but good economics too.  Even so, the UK's fiscal consolidation stands out in comparison to the net fiscal loosenings elsewhere. This fiscal prudence reflects the Chancellor’s attempts to restore the government's fiscal credibility. But it is also a matter of choice based on the Chancellor’s new self-imposed fiscal rules and his chosen headroom against them.

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