Future UK austerity

By the end of 2013, the UK government will have implemented 52% of planned fiscal consolidation.

The IFS report that most of this fiscal consolidation has come through taxes. In coming years, we will see the impact of cuts to the benefit budget. Only 58% of the total cuts to benefit spending have been implemented, and only 31% of overall cuts to other spending (non-investment) have been achieved. (IFS fiscal squeeze)

One consequence of this is that there is likely to be an increase in income inequality from 2013-14, as low income groups experience the impact of the benefits squeeze.

Timing and composition of UK Fiscal consolidation

UK fiscal consolidation

source: IFS

 The good news is that 90% of public investment cuts have been implemented, and in the latest spending review, the government has pledged to increase public investment.

Related

Nominal Government Spending

total government spending £ bn % change
2000 338.07
2001 362.57 7.25
2002 384.93 6.17
2003 415.21 7.87
2004 451.5 8.74
2005 488.31 8.15
2006 502.56 2.92
2007 543.96 8.24
2008 575.97 5.88
2009 621.4 7.89
2010 660.81 6.34
2011 681.33 3.11
2012 687.96 0.97
2013 676.57 -1.66
2014 715.27 5.72
2015 728.87 1.90

source: UK public spending

1 thought on “Future UK austerity”

  1. It seems to me that politicians in general know very little about economics. In order to counteract the effects of the ongoing crisis in UK, maybe it’s time politicians and administrators took advice from professional economic crisis specialists with a proven track record of positive results. For example, the Orlando Bisegna Index, specialists in the economic crisis, have developed a program that has helped various counties with debt problems, business failures and unemployment.

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