11 March 2020
Ian Stewart, chief economist at Deloitte, comments on the Budget:
“Major shocks to economies need to be resisted with a swift, aggressive and coordinated policy response. Today’s actions by the Bank of England and Treasury have delivered on each count.
“Mark Carney and Rishi Sunak have produced a forceful and convincing response to the crisis. In economic policy terms they just deployed the big bazooka.
“Today’s coordinated actions suggest the government will do whatever it takes to help the economy through the coronavirus crisis.
“Public sector austerity ended last year. Even before the coronavirus hit, public spending was surging, with public sector recruitment growing at the fastest pace in 14 years and day-to-day spending rising at four times the rate of the wider economy.
“The Budget measures to fight coronavirus will turbo charge public spending with borrowing taking the strain. Public borrowing is set to rise at the fastest rate since the financial crisis.
“But this is not just a one-off boost to spending in the coming year. The increases in the ensuing years of this Parliament will be even larger. Most of the spending that is to come was announced in last September’s Spending Round.
“Over each of the next five years government spending will be one of the big drivers of economic growth, significantly outpacing GDP growth.
This Budget marks a decisive pivot away from austerity.”
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