The resignation of Nigel Lawson as Chancellor of the Exchequer, and the appointment of John Major to replace him, has been accompanied by vigorous denials of any change in the aims or conduct of economic policy. There may nevertheless be some modification of the stated reliance on interest rates alone as the means of combating inflation. The previous Chancellor was heavily committed to a programme of cuts in income tax; the new Chancellor may feel less so. For that reason we are now assuming that no net change in taxation will be announced in the 1990 Budget.