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- The UK has seen a huge increase in Government spending and borrowing which has produced the largest peacetime budget deficit ever. This cannot all be blamed on the 2008-09 recession.
- Tighter fiscal policy will allow monetary policy to remain loose for longer, which will support business investment, consumption and net exports.
- Academic research suggests that cutting Government expenditure is better then tax rises as a way to implement fiscal consolidation.
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cin26.pdf