Fiscal rebalancing plans in the medium term: the case of the United Kingdom

Júlia Brunet and Susana Parraga Rodriguez

Economic Bulletin, 2021, issue 2/2021, No 15

Abstract: The extraordinary fiscal policy response to mitigate the strong economic impact of the COVID-19 pandemic has pushed public debt notably higher, exceeding its peak levels of the last five decades in the main advanced economies. Additionally, support for the economic recovery will foreseeably require maintaining a sizeable fiscal impulse in the short term. In this setting, announcing mediumterm plans to rebalance public finances would be suitable, according to the studies available. These plans recoup the countercyclical room for manoeuvre of fiscal policy, as well as anchor economic agents’ expectations and reduce the potential risks of high government indebtedness for future economic activity. This article describes the example of the United Kingdom, the first country to propose a gradual fiscal adjustment programme for the medium term, while maintaining public support for the economic recovery in the short term.

Keywords: sovereign debt; fiscal policy; policy coordination. (search for similar items in EconPapers)
JEL-codes: E61 E62 H63 (search for similar items in EconPapers)
Date: 2021
Note: Analytical Articles
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bde.es/f/webbde/SES/Secciones/Publicac ... es/be2102-art15e.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2021:i:06:d:aa:n:15

Access Statistics for this article

More articles in Economic Bulletin from Banco de España Contact information at EDIRC.
Bibliographic data for series maintained by Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España ().