Press reset to steady the economy

One of Philip Hammond's first pronouncements on being made Chancellor of the Exchequer in July was to signal that he was open to a "reset" of the economy if post EU referendum conditions demanded it. And if economic turbulence was feared after Brexit, expect even more of a rollercoaster ride as the markets react to Donald Trump's victory in the US presidential election.

So what would a reset mean? There have been a number of clues. The Government's abandonment of the target of running a budget surplus by 2020 gives Mr Hammond room for a modest relaxation of the planned spending cuts. Hints have also been emerging that he is prepared to use spending on infrastructure projects to provide a short-term fiscal stimulus to support the economy.

That would mean concentrating on smaller projects that can be put into effect quickly, and it chimes with comments from Transport Secretary Chris Grayling that a change in emphasis towards smaller-scale projects can be expected under his tenure at the DfT. Current historically low interest rates make borrowing to invest a prudent course of action for the chancellor.

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