It was good to be on BBC World at One with Sarah Montague again discussing why targeted and timely tax cuts aren’t inflationary. We face twin problems of high inflation and weakening domestic demand. We need tighter monetary policy to address inflation and a looser fiscal cuts to address weakening demand.
Fiscal action should not only be timely, targeted but fully costed. Some measures – like cutting VAT or other taxes on fuel – will help mitigate the impact of higher fuel prices & reduce costs in the supply chain.
This and others measures like higher allowances can help mitigate the cost of living crisis. These can be immediate. Some plans may need to be wait to fully costed in the Autumn Budget.
Listen back here from 13:30-20:00.