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Planning Feature The Forecast in Detail: (2) Assumptions
Publication year - 1983
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/j.1468-0319.1983.tb00523.x
Subject(s) - economics , interest rate , fiscal policy , indexation , macroeconomics , feature (linguistics) , inflation (cosmology) , econometrics , monetary policy , monetary economics , linguistics , philosophy , physics , theoretical physics
We continue to make our best guesses about likely policy developments rather than assuming ‘ unchanged policies ’. This forecast differs from our July forecast in that we have not assumed any income tax cuts; nor have we assumed, as we did in July, that National Insurance contributions would be increased. We do, however, continue to assume the abolition of the national insurance surcharge in two equal stages during the 1984‐5 fiscal year, as well as the usual indexation of tax allowances and bands and revalorisation of indirect taxes. This change in assumptions about policy reflects our guess that the new Chancellor, Nigel Lawson, will attempt to hit his monetary targets by a combination of tighter fiscal policy and lower interest rates than we had previously assumed. In this forecast interest rates are on average about 2 points lower than in July.