Although Campbell is right to point out that markets do play a significant role in government spending, Polanski is on to something deeper that could help reframe the debate around the UK economy. While Rachel Reeves might be celebrated for scrapping the two-child benefit cap, the latest budget doesn’t go nearly far enough in delivering the change that Britain desperately needs. Austerity has scarred the UK for the last 14 years. If it wants to finally break free, then it’s time for a radical new approach. And that starts with rethinking how government finances work.
Possible soft paywall - I got round it by opening in private tab / using reader mode
I would have thought people who were proponents of the original formulation that said inflation is not affected by government spending - because of globalisation and China - would have egg on their face after we had >10% inflation immediately after all the covid spending.