One way or another, the UK is destined for looser fiscal policy. How much and in what form is unclear, but the one thing that is clear is that it will require a new set of fiscal rules. There are many options and we do not know for sure what the Chancellor will choose. But a target of a balanced “current budget” (excluding investment spending) seems most plausible, with some guidance on the level of debt. That in theory could allow a fiscal stimulus focused mainly on investment worth up to 1.5% of GDP (or around £32bn) in the Autumn Budget on 6th November.
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