Labour Has No Choice But to Move the Fiscal Goalposts
Redefining spending as investment should help meet budget targets.
How will the UK Labour government account for infrastructure spending?
Photographer: Christopher Furlong/Getty Images EuropeAfter a rocky first few weeks in power, Prime Minister Keir Starmer needs a gamechanger. Shock and awe on the fiscal front are about to rain down in the Oct. 30 budget. Taxes, spending and borrowing are likely to rise substantially, but the essential is making it all palatable to the bean counters (and bond markets) with some accounting legerdemain.
It helps that Organization for Economic Cooperation and Development Chief Economist Alvaro Santos Pereira said at its press conference last week: “The UK needs more investment, so we need to create fiscal space to do so.” The International Monetary Fund has made similar warm noises.