Inside the black box: the public finances after coronavirus

This paper considers the implications of the Covid–19 crisis for the UK public finances. The Covid-19 crisis will affect the public finances through higher unemployment, reduced tax revenue and substantial government spending on schemes to support the economy. Already there are calls for a return to austerity once the most acute phase of the medical emergency has passed. It can be difficult for citizens to take a position on these debates: many feel that they lack the technical knowledge. Forecasts of public debt and deficits play an important role in framing these debates. Media headlines give the impression that higher public debt presents an immediate danger to the financial security of the average citizen. This limits the ability of voters to question their government’s policies on the basis of an informed position on the likely costs and benefits of alternative strategies. This briefing presents an interactive forecasting tool.