The new “magic money tree” appears to have no roots

“… Remember the “magic money tree”? The Conservative party appears to have found it, if the rash of spending promises of new Prime Minister Boris Johnson are anything to go by.

Johnson appears to be doing two things with his promises of billions for railways, tax cuts and “left behind” towns, write the Guardian’s Larry Elliott and Richard Partington: revving up the economy to gain support for his plans with a fallback that more spending could cushion the fallout of a no-deal departure.

Although framed by Johnson as spending headroom at his disposal, economists say the additional firepower is something of an illusion. Thomas Pugh, of the consultancy Capital Economics, said:

This isn’t money sitting in a savings account waiting to be spent. It’s more like borrowing from an overdraft where the limit is set at 2% of annual income. So spending it would result in a higher deficit and more borrowing. …”