Ex-BOE Economist Haldane Backs Conservatives' Smaller-State Economic Plan Over Labour

Andy Haldane, a former adviser to Andy Burnham, endorsed the Conservative Party's economic plan, saying it is "better suited" to fixing Britain's problems by delivering a smaller state and lower taxes rather than Labour's public spending increases, the Financial Times reported. Haldane, former chief economist at the Bank of England and now president of the British Chambers of Commerce, wrote that Labour's plan for an "expansive (and expensive) state sits uncomfortably with this precarious fiscal backdrop." He said Conservative plans to cut business and employment taxes and regulation to "unleash animal spirits" and slim government spending to lower borrowing costs are "far more likely to succeed." He warned Labour's larger-state plans risk "a loss of confidence in bond markets," invoking a "Liz Truss-plus" scenario. The intervention precedes Chancellor John Healey's maiden Budget next week, amid speculation of tax rises on banks and family businesses. Economists estimate the Iran war has halved his fiscal headroom to just £12 billion, with borrowing costs rising sharply ahead of the fiscal event.