The Chancellor’s crisis management has been excellent. The Budget was another reflection of that, as Rishi Sunak unveiled further significant, targeted support to the areas of the economy that needed it most.
Over the last year, fiscal policy has acted as the main shock absorber for the economy. Including measures announced today, a massive £352 billion has been spent on Covid support. This approach has been fully justified, with low inflation, rates and yields providing ample fiscal space. Debt dynamics have allowed the government to borrow cheaply from investors.
Also, as we have seen over the last year, the Bank of England’s Quantitative Easing programme has led it to become the biggest buyer of gilts.