Good news on the economic recovery post covid, has the government licking its lips. But it doesn’t do much to change the relative performance of the UK economy, it is still better than Germany worse than the USA, France and Italy.
Most importantly it doesn’t add a penny to the Chancellor’s coffers. It will however mean that the OBR will have to revisit its calculations on the debt to GDP ratio in the UK. That has already fallen below 100%, this change will reduce it further.
That is a short term boost and doubtless the Chancellor will borrow some more as a result and give it away before the election.
But long term the figures are still disastrous. Either the debt ratio increases remorselessly over the coming years and decades or governments will have to raise taxation or they will just have to stop doing something expensive, like the state pension.
Jeremy Hunt should bank the reduction in debt, it is the responsible, long term and responsible thing to do, but he won’t. Short-termism and political cynicism will win out.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media
And the public sector shopping list just gets longer everyday