SLI: Time to rewrite the UK’s fiscal rules
Standard Life Investments believes that it is time for a reset of fiscal policy to address both short and long-term challenges in the UK economy.
The Edinburgh-based global investment firm says a a “well-targeted stimulus would help cushion an expected slowdown in growth following the UK’s vote to leave the European Union”.
SLI says such a move would also provide ammunition to address the deterioration in growth rates seen over recent years, through targeted investment and structural reform. With markets concerned over the long-term effects of leaving the European Union, these priorities have become even more pertinent.
‘Time to rewrite the UK’s fiscal rulebook’ is the first in a series of Public Policy Perspectives, a new research publication from SLI which aims to broaden the debate on policy issues across a range of economies and make neutral, evidence-based recommendations.
The paper argues that a coordinated fiscal and monetary stimulus would represent a much more effective policy mix than monetary easing alongside further fiscal austerity. The upcoming Autumn Statement provides an ideal opportunity for a step change.
In the document SLI proposes:
‘Time to rewrite the UK’s fiscal rulebook’ is co-authored by James McCann, UK & European Economist, and Stephanie Kelly, Political Economist, at Standard LifeInvestments.
Mr McCann said “Monetary policy has been overburdened since the financial crisis, with fiscal policy actually working against the recovery. A large fiscal push in the Autumn Statement would complement the easing measures implemented by the Bank of England over the summer. It would also help lift long-term growth rates, primarily through targeted infrastructure spending and structural reforms.”
To read the full publication please click here