Economy and public finances Chancellor right to abandon Budget surplus target in the face of any post-Brexit deterioration in the economy 1 July 2016 Responding to the Chancellor’s announcement today that he has abandoned his Budget surplus target for 2020, Matt Whittaker, Chief Economist at the Resolution Foundation, said: “It’s welcome – though not surprising – that the Chancellor has explicitly acknowledged that it would be wrong to pursue a surplus in the face of any post-Brexit deterioration in the economy. “In the short term, this means allowing the automatic stabilisers to cushion the impact of any downturn. Looking forward, given the uncertainty about the wider economic impacts, the Treasury should join the Bank of England in preparing a more active response should it be required. “This should include revisiting the £12 billion cuts to working-age welfare penciled in for this parliament which pose a real risk to living standards at a time when household incomes already look set to be severely squeezed.”
