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Originally posted by Lazarus and the Gimp
There was more to it than that. The tax cuts in the 1988 budget at a point when the economy was already seriously overheated were the factor that kicked off the inflationary spiral at the very start of the recession. The huge balance of trade deficit was also an issue.
Debateable. Labour had much greater scope to tackle inflationary pressure with tax rises in the run-up. Black Wednesday would probably have happened, but quite possibly to a lesser extent.
Plus, of course, they would probably have blamed it on the Tory legacy.
There was more to it than that. The tax cuts in the 1988 budget at a point when the economy was already seriously overheated were the factor that kicked off the inflationary spiral at the very start of the recession. The huge balance of trade deficit was also an issue.
Debateable. Labour had much greater scope to tackle inflationary pressure with tax rises in the run-up. Black Wednesday would probably have happened, but quite possibly to a lesser extent.
Plus, of course, they would probably have blamed it on the Tory legacy.
It turns out that the Treasury and Bank of England seriuosly underestimated the strenght of the UK economy at the time and had no clue about the asset price bubble. Now the politicians should take ultimate responsibility for this of course.
If Labour were in power on Black Wednesday then it would have been easy to portray it as a Labour econimic disaster. If they were in power it woud have been in spite of there economic repuattion not because of it.
Imagine the headlines "Kinnock kills the pound"
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