Could Hammond change the UK's fiscal direction?

Philip Hammond Image copyright EPA

Well, that was a surprise.

Among the warm words on Sino-British relations (the UK still wants to be a major investment partner with China) the new chancellor of the exchequer dropped a small grenade.

He said the government would be willing to "reset fiscal policy" if it was deemed necessary, given the decision on Brexit.

Following on from Theresa May's announcement that the government's 2020 target to eliminate the deficit was no more, Mr Hammond looks like he is considering a radical approach, should the economy need a kick start.

That opens up a host of possibilities.

More borrowing?

More infrastructure spending supported by the state as well as private money?

Yes, the government has said it wants to "live within its means".

And nothing has been decided.

"Reset" is only one word, after all, though a significant one.

But, as with Mrs May, Mr Hammond might be rather more headline grabbing on changes in economic direction than some expected.

Particularly if the economy looks sickly ahead of the Autumn Statement.

Related Topics