U-turn in UK: Room for fiscal fireworks is limited

It is best to stick to tried and tested methods of reviving growth - deregulation, macroeconomic stability, and targeted investment

After 10 days of sustained pressure following her administration’s first “mini-budget”, UK Prime Minister Liz Truss was forced into a U-turn on a major aspect of her fiscal plans. Just hours after insisting that the plan would be executed as announced, the government — through Chancellor of the Exchequer Kwasi Kwarteng — said it would not go through with a tax cut for those earning more than £150,000. The pound, which had collapsed over the previous week to a historic low, revived slightly against the dollar as a result. The tax cut itself was more signalling than anything else, since