Archive

March 26, 2025
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UK Fiscal Smoke Over Treading Water

  • Attempts to recreate fiscal headroom after slippage rely on implausible and optimistic assumptions. Further tax rises and delayed prudence are likely in the Autumn budget.
  • Replacing aid resources with capital defence spending helps loosen fiscal policy inside the budgetary rules. Policy changes are relatively neutral over the next few years.
  • Without corrective action, the gross financing requirement path is £18bn a year higher than in the Autumn, and almost £50bn higher than last Spring, burdening gilt issuance.

By Philip Rush

March 17, 2025
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EU: Defence Spending

  • The EU faces two imminent deadlines in determining defence spending. On 20 March, the Commission presents its full loans-for-arms proposal to a divided European Council, and on 24 March, the ‘old’ Bundestag will step down, after which easing Germany’s debt brake becomes even harder.

By Alastair Newton

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