Lord Lawson wants interest rates cut and not cuts in taxes to deal with the impending recession. Contrast this with what what Ken Clarke recently said on Newsnight that interest rate cuts would have a negligible effect on reviving the economy. Which one of them is right?
From recent statements made by the Chancellor it seems he will try and borrow his way out of trouble with some tax cuts being funded by the additional borrowing highly likely . The fiscal rules laid down by Gordon Brown as Chancellor have been binned with the Chancellor saying it would be perverse to stick with these in the current economic climate. We’re back to the the Monetarists v Keynes economic debate with the Chancellor all set to favour Keynes.