As in most other OECD countries, the fiscal situation in the UK has deteriorated sharply. While to date the discretionary fiscal stimulus has been relatively modest, after around the turn of the century the underlying fiscal position weakened more than anticipated. While there was some subsequent improvement, particularly in tax receipts, the severe impact of the downturn on the public finances and the borrowing related to the rescue of the financial sector will take public debt to levels in line with or even exceeding other European economies. The government has set out a commitment to bring the cyclically-adjusted current budget back in balance and ensure debt is falling as a proportion of GDP once the economy is recovering, and has announced fiscal consolidation plans worth over £ 50 billion. The government needs to ensure it delivers on its commitment to implement a sustained consolidation. While the Code of Fiscal Stability provides the foundations for a sound fiscal framework the government should consider reformulating the fiscal rules once uncertainties have reduced. Any reformulation should provide for expenditure discipline, and be forward looking. The current temporary operating rule that was put in place with the suspension of the fiscal rules in the November 2008 PBR is forward looking in this way.