The immediate consequence is that the Bank of England is likely to again raise interest rates to damp down inflation and consumer spending: not sharply, perhaps, but steadily.

ECONOMIST: A disappointing start

Mr Greenlaw says the closest precedent was in 1968, when individual, corporate, excise and payroll taxes collectively rose by the equivalent of 3.1% of GDP, mostly to pay for the Vietnam war and to damp down inflation.

ECONOMIST: Fiscal policy: Cliff-diving | The

In order to pop a property bubble and damp inflation, the government has tightened credit, driving property prices down by something like 20%-30%.

WSJ: China Might Have Over-Reached Itself