Pressing the reset button: the public finance options facing the new Chancellor at the Autumn Statement

In the run up to the Autumn Statement, the Chancellor has already indicated the need for a fiscal ‘reset’. While this has been over-interpreted as a hint of a radical shift in macro-economic policy, it simply represents recognition of the need to drop his predecessor’s fiscal pledges if he is to avoid making significant additional tax rises or spending cuts at a time when the economy will already face increased headwinds.

In this note, we consider the new fiscal rules that the Chancellor might choose to adopt as part of this ‘reset’ and the headroom that might afford him.