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Digital Subscriptions > Prospect Magazine > January 2017 > Austerity forever?

Austerity forever?

Theresa May has ditched George Osborne’s plan for a surplus, and talked of investing in infrastructure. But don’t imagine the days of retrenchment are done: Philip Hammond, the new chancellor, is planning a savage squeeze. Carl Emmerson is Deputy Director of the Institute for Fiscal Studies

The post-Brexit blues:

The only dispute is how much money’s gone missing

After the Brexit vote, the pound tumbled and markets got jittery for a time, but there was no general slump. Brexit, however—whatever it may turn out to mean—hasn’t happened yet. And both sets of forecasters retained on the public payroll are agreed the UK economy will, more likely than not, soon be smaller than it would have been if things had gone the other way. The Office for Budget Responsibility, the official watchdog on which Chancellor Philip Hammond relies when he’s setting tax and spending policies, has revised down its forecast for growth through to the end of 2017 by 1.1 per cent, a downgrade which reaches to 1.4 per cent by 2021. Some Brexiteers have argued this is a small number clouded in uncertainty. That is true, but uncertainty cuts both ways. The Bank of England, like many other commentators, has pencilled in an even sharper downgrade.

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About Prospect Magazine

In Prospect’s January issue: Adam Tooze and Francis Fukuyama examine the “American Century.” Tooze says that the 1917 opened the door to the future because the US seized the chance to lead, rather than for the Russian Revolution. Fukuyama says that the US has fallen from its perch, a change embodied by the election of Donald Trump. Anna Blundy puts Samuel Pepys on the couch and uses his diaries to psychoanalyse the Restoration’s chronicler. Also in this issue: Chris Bickerton examines the rise of populist parties across Europe, Peter Tatchell and Malcolm Rifkind debate whether the Uk should stop pretending Trump’s US can be its best friend, Philip Collins reviews a collection of Brexit books and DJ Taylor examines Alan Bennett’s diaries.
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