The OBR’s supply-side review will have political implications

Here’s a link to a piece published in CityAM this morning that explores the political implications of the Office of Budget Responsibility’s decision to review over the summer its estimates of the supply side potential of the economy. Since the ability of the economy to grow without causing inflationary pressures is linked to estimates of the structural deficit, any change will affect the perceived success – or otherwise – of the government’s attempts to meet its self-imposed target to eliminate it.  A smaller structural deficit and the government looks economically competent; a larger one and the rhetoric will shift to the need for longer-term solutions.

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