Matthew Lynn Matthew Lynn

This isn’t a return to boom and bust

Massive tax cuts. A huge budget deficit. And a wild dash for growth, stoking a short-lived boom, before it all ends in a spectacular crash. As the new government unveiled the widest ranging tax cuts since the 1980s, along with a huge increase in the budget deficit, City commentators and the wiser sort of newspaper pundit are already comparing it to the ‘Barber boom’ of 1972 or the ‘Lawson boom’ of 1988. Both of those ended very badly. In their dreams, Sir Keir Starmer and Rachel Reeves are probably already fantasizing about an ashen-faced Liz Truss and Kwasi Kwarteng calling in the IMF for an emergency bail-out – before getting wiped out at an election. But hold on. In fact, this is not a return to Tory boom n’ bust. 

True, Kwarteng today unveiled some major tax cuts, including abolishing the top rate of 45 per cent, and lowering the standard rate to 19 per cent.

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