If we are playing what-if, however, I can’t see scenario B playing out if the government have to impose capital controls to stop money leaving the U.K.
Scenario B is the alternative to capital controls to achieve the same thing - either you prevent money leaving or use fiscal policy to attract new money. I can understand why the latter is more attractive when facing a balance of payments crisis.
If we are playing what-if, however, I can’t see scenario B playing out if the government have to impose capital controls to stop money leaving the U.K.
No use buying an asset you can’t sell.