A macroeconomic view of the 1989 Budget

<p>This year the Chancellor introduced a quiet Budget, but not a dull one. In macroeconomic terms, the modest tax cuts that the Chancellor introduced represent a slight tightening of the stance of fiscal policy. This was very much in line with our pre-Budget forecast, and was largely dictated by inflation prospects and balance of payments concerns. Our view, both-pre and post-Budget, is that this stance of fiscal policy, together with continued tight monetary policy, will slow domestic demand growth and inflation, and avert a continued deterioration in the balance of payments. The outlook, therefore, is for a soft landing for the UK economy. </p>