When asked about the UK’s economic plans, Deese of the White House stresses ‘fiscal prudence’

When asked about the UK’s economic plans, Deese of the White House stresses ‘fiscal prudence’

By Andrea Shalal

WASHINGTON (Reuters) – White House economic adviser Brian Dees said on Tuesday he was not surprised by the negative reaction of financial markets to Britain’s fiscal plans and tax cuts, stressing the need to maintain “fiscal prudence and fiscal discipline.”

Dess, speaking at an event hosted by the Economic Club of Washington, DC, said Britain’s plans came during a cycle of monetary tightening and put monetary authorities in a position where they would likely have to tighten further.

“In a monetary tightening cycle like this, the challenge with this policy is that it puts the monetary authority in a position to potentially move more tightly. I think that’s what I saw in response,” said Dess, the White House national director. Economic Council.

“It is particularly important to maintain the focus on financial prudence and financial discipline,” he said.

Des’ comments came hours after the International Monetary Fund targeted Britain’s fiscal plans, warning that “large, untargeted fiscal packages” are likely to increase Britain’s inequality and could undermine monetary policy.

In its first comments on the plans of Britain’s new finance minister, Kwasi Quarting, that have sent sterling and bonds into free fall, the International Monetary Fund urged British authorities to consider providing more targeted support to families and businesses rather than big tax cuts and sharply increase government spending. .

Dess told reporters after the event that the dollar’s strength reflects the relative strength of the US economy.

“In a highly uncertain global environment…what we’re seeing is a strengthening of the unique position of strength in which the United States economy is, despite all the complexities in our recovery,” he said.

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Asked if he was concerned about spillovers from weaker economies elsewhere in the United States, Dess referred to Europe, Britain and China, and said the Biden administration was paying “high attention” to pockets of “special weakness” in global growth. a path.

Asked during the event whether the US economy is heading into a recession, Dess pointed to signs of resilience, including the balance sheets of consumers and businesses, and investments.

“We are certainly going through a complex transition that is unprecedented in many ways, but I think there is reason to have a lot of confidence in the position of the United States, in the context of an uncertain global climate,” he said.

He said that Britain and Europe faced a very difficult situation and were more exposed to fluctuations in energy prices.

Desi also said that he believes that the successive military and economic problems facing Russia after its invasion of Ukraine on February 24 are increasingly stressing the country.

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