Box sets » Fiscal risk management
Fiscal space is an important consideration for how quickly and effectively a country's government can respond to a large shock. In this box, we explored different definitions of fiscal space over time, its multi-faceted nature and how the UK's position has evolved over the course of the coronavirus pandemic.
The National Risk Register (NRR) provides the Government's assessment of the likelihood and potential impacts of a range of risks to the safety and security of the UK. In this box box we compared the topics covered by the NRR and those we have focussed on in our risk analysis.
The Russian invasion of Ukraine in February 2022 led to questions over the impact that cyber attacks were likely to have during the conflict. This box looked at the history of cyber-related activity in the region, and the evidence available for cyber impacts of the conflict to date.
Given signs of pressure in the cyber insurance market, this box considered previous precedent of government intervention to help private insurers provide cover for large and uncertain risks. This included a detailed look at Pool Re, one of the longest running government-guaranteed reinsurance schemes, for terrorism risk.
The debt-stabilising primary deficit depends on the level of debt, nominal growth rates, the effective nominal interest rate, and any 'stock-flow adjustments'. This box discussed the historical evolution of the debt stabilising primary balance, and also explained why it may appear to be ‘easier’ to stabilise debt the higher it rises, and the fiscal risks that such an interpretation entails.
Between our 2017 FRR and our 2019 FRR the Government undertook a number of initiatives to deepen its risk management. This box summarised these changes.