Economic Cycle

Treasury written question – answered on 7th November 2001.

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Photo of Michael Howard Michael Howard Shadow Chancellor of the Exchequer

To ask the Chancellor of the Exchequer what definition of the economic cycle he employs for the purpose of calculating the cyclically adjusted budget surplus or deficit; what his assessment is of the typical lengths of an economic cycle; and what assessment he has made of the (a) start and (b) end date of the last economic cycle.

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

The Treasury's methodology for assessing trend growth and the output gap is set out in the publication "Fiscal policy: public finances and the cycle", HM Treasury, March 1999.

Paragraphs 2.35 and 2.36 of Budget 2001 set out the assessment of the last cycle; this will be updated in the next pre-Budget report.

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