The broad shape of the UK Budget was largely as expected, but the scale of the increases in current spending, capital spending, and taxation were larger than we had anticipated.
Capital Spending
Last week’s Budget highlighted the flaws at the heart of the UK’s dysfunctional fiscal policy, particularly its poorly-designed fiscal rules. We think reforming these rules would help to cut government debt, provide more support to growth, and reduce the scale of austerity that the next parliament will be forced into.
