Chancellor’s ‘black hole’ claim ‘unnecessary and unhelpful’, says ex Bank of England economist
Former senior economist Andy Haldane told Sky News that Rachel Reeves’s comments earlier this summer had spooked consumers, businesses and investors.
The chancellor’s claim of a £22bn “black hole” in government finances was “unnecessary and probably unhelpful economically”, a former Bank of England chief economist has said.
Andy Haldane told Sky News’ Politics Hub with Sophy Ridge that Rachel Reeves’s statement in July was a “bad idea” because it generated a sense of “fear and foreboding” just when there was a new-found confidence in the UK.
Ms Reeves made the claim within weeks of taking office in what was widely seen as a warning that her first budget in October would be a painful mix of spending cuts and tax rises.
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He said: “The black hole event was unnecessary and probably unhelpful economically.
“It’s one thing to reveal a black hole, if that indeed is what it is. But just leaving that to sit for three months I think was a bad idea.”
Asked what the government should have done, he said it was “much better to say nothing until you provide solutions”.
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