Is there light at the end of the austerity tunnel?

In a Budget devoid of significant pre-election giveaways or major revisions to the economic forecasts, the most important changes were to the spending plans. While the Chancellor stuck to his overall spending figures for the next few years, he was able to present a brighter outlook for departmental spending – ‘only’ a 7%, rather than 14%, real cut lies in wait over the next 5 years.

And the eventual cuts to public services could be smaller than this. Both the Tories and Lib Dems have separately set out plans to shift the burden away from government departments further. In addition, the OBR economic forecasts still look a bit too pessimistic. Nonetheless, the next government will have a strong incentive to front-load austerity measures in the next parliament, hoping that they will be a distant memory come the next election. So while there is light at the end of the tunnel, the UK remains on course for a major re-intensification of the fiscal squeeze in 2016.