Making Financial Headlines · Page 6
Borrowing Restraint Receives an Unusual Round of Applause
· New York time
Top IMF officials praised UK plans to reduce annual borrowing on three occasions within 24 hours, according to BBC reporting ahead of the Budget. Fiscal restraint rarely gets this much applause, particularly from an audience generally associated with serious tables and tightly supervised adjectives. The praise is a favourable assessment of the policy direction. The plans concern reducing annual borrowing, which is a flow of new borrowing over a period, rather than a promise that the existing stock of debt will simply disappear. The national balance sheet cannot be tidied by deleting the previous page. A borrowing objective also leaves decisions about revenue and spending. Different measures can pursue the same overall direction while affecting households, businesses and services differently. Approval of the destination does not write every instruction for reaching it. That makes the eventual composition of the Budget important alongside the international reception. Compliments do not specify which taxes change, what receives funding or where individual tradeoffs fall. Those questions still require actual measures and numbers, neither of which can be replaced by a particularly encouraging nod. Three favourable interventions in a day make the signal notable. They do not make it a complete fiscal document. The applause has arrived early; the rows of the spreadsheet must still take their places and explain who has been assigned the bill.
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