MNI BRIEF: UK Fiscal Rules Loose - ex-OBR Head Hughes

The UK's fiscal rules are loose by advanced economy standards and do little to rebuild financial resilience, Richard Hughes, the recently departed head of the Office for Budget Responsibility, told lawmakers Tuesday.

 

Asked if the rules were too pro-cyclical Hughes said that the issue instead was how loose they were, with rolling fiscal targets allowing the government to run a budget deficit of 5 percent of GDP of which much is structural. "Other countries have been much faster in rebuilding resilience," Hughes said, after they faced common fiscal shocks.

 

Speaking to the House of Lords Economic Affairs Committee, Hughes rejected the idea that the OBR was itself acting as a brake on growth. He said that it has no power to advise on policy and UK governments set their own fiscal rules.