Commenting on the Spending Review announced by the Chancellor of the Exchequer today, Andrew Smith, Chief Economist at KPMG in the UK, said:
“Filling-in the details of the already-announced spending envelope for 2015/16 was never going to be a big deal in macro-economic terms. In the overall scheme of things the £11.5bn of spending cuts, out of the £750bn-odd spending total, is two years ahead and within any normal forecasting error – but it does highlight how tight the public finances are and will remain through the rest of this Parliament and into the next, when further swingeing spending cuts are pencilled in.
“And of course even these projections are premised on the economic recovery strengthening from here. While 2013 has got off to a reasonably encouraging start at home, the recovery can hardly be called robust. With fiscal policy ruled out, the onus on keeping it going in an increasingly choppy international and financial market background falls to monetary policy. Welcome, Mr Carney.”
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