Britain’s expansionary budget

BRITAIN HADGDPMP a particularly bad bout of covid-19 and took an especially large economic hit as a result. In response the government provided more fiscal stimulus than almost any other in the world, paying millions of people’s wages and bailing out businesses to the tune of 16% of . As Britain slowly lifts its lockdown the conversation has turned to balancing the books, and ahead of the budget on March 3rd the Treasury briefed that fiscal austerity was in store. Yet Rishi Sunak, the chancellor of the exchequer, will wait to turn the screws. He delivered a surprisingly generous budget, and has postponed tax rises. Like a fiscal St Augustine, he wants continence—but not yet.The budget represents the synthesis of two opposing forces. On the one hand Mr Sunak wants to placate a range of hawkish constituencies, such as Thatcherite backbench Tory s who would rather the government keep taxes low and bond traders who in recent weeks have sold their investments in sovereign debt. On the other hand he is rightly concerned not to repeat the mistake of his predecessor-but-two: after the financial crisis in 2007-09 George Osborne cut spending and raised taxes too soon, thereby delaying the recovery.