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No brainer

Gordon Brown can boost revenues and lower the pound

By Gerald Holtham   March 2000

Britain faces an economic policy dilemma. The housing market is booming and interest rates may need to go higher to hold back domestic demand. Those higher rates may push up the pound. Yet the pound is already at an 11-year high against euro currencies, and if we want the option of Emu entry, we need a lower pound soon, followed by a period of stability.

The orthodox answer is to tighten fiscal policy (raise taxes or cut spending) to restrain demand, in the hope that interest rates, and the pound, will fall. But Labour is committed to higher health spending,…

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