- The Autumn Statement saw the government pledge to restore the UK’s fiscal credibility
- Making economic policy decisions in an uncertain environment is fraught with difficulty
It is hard to believe that less than two months ago, Truss and Kwarteng announced £45bn worth of tax cuts and introduced a 2.5 per cent target for economic growth. In the Autumn Statement, the new chancellor cautioned that the UK economy was poised to enter a recession, and introduced £55bn of spending cuts and tax rises - the most austere measures since 2010. The about-turn has been breathtakingly fast.
The fall-out from September’s “mini” Budget highlighted both the importance of Office for Budget Responsibility (OBR) scrutiny and credible spending plans. Yet chancellor Jeremy Hunt faced the tough balancing act of reassuring markets and avoiding damage to the economy. It seems he may have pulled it off: the Autumn Statement met a muted market reaction, and Paul Dales, chief UK economist at Capital Economics, argues that Hunt has “protected the economy by loosening policy for the next two years and implementing the tightening in the following three years”.