Cazenove's Jeffrey: Not going wobbly on public finances

ECONOMY

While there may be some disagreement over the timing of the required action, there can hardly be any dispute that public sector finances require fixing. Of course, there is also heated debate over the exact nature of the fixes that are required.

Unfortunately, when trying to analyse many of the suggested remedies, it is more important to understand the politics than the economics of the proposition – for instance, with regard to the so-called mansion tax. From my perspective, the best guide to the solution is provided by understanding the cause. In this context, it is important to consider the structural reasons for the deficit in a different light to the cyclical issues. While it is impossible to make an absolute distinction between the two, it is self-evident that a slowdown or recession will have detrimental short-term imp...