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Analysts at Nomura suggest that the UK’s budget was a giveaway budget, largely thanks to spending on the National Health Service (NHS) but also owing to a modest fiscal easing on top of that too.

Key Quotes

“One might say – ‘but didn’t we know about the higher NHS spending already?’ The answer of course is ‘yes’ – the government announced the sizable spending increase on health in June. But what we didn’t know until yesterday was that it would not be funded by a rise in taxes or a cut in spending elsewhere. That’s what makes yesterday’s budget a big deal fiscally.”

“In short, the measures announced in yesterday’s budget are worth around 0.7% of GDP per year between 2019-20 and 2021-22, rising to over 1% of GDP by the end of the forecast horizon. This is, therefore, the biggest fiscal loosening since the recession following the financial crisis.”