Tuesday, August 16, 2022

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Is the United Kingdom Savagely Cutting Spending?

In new Mercatus research, UK-based economist Anthony Evans goes in search of the data. He finds:

  • The UK government’s response to the recession has been to eliminate the structural budget deficit over the medium term.
  • There are changes in the composition of government spending but not a fall in the absolute level.
  • Forecasts of falling government spending as a proportion of GDP are due to implausible growth forecasts rather than an absolute reduction in spending.
  • History indicates that the government overestimates its ability to fund austerity through spending cuts, and therefore above-expected tax rises are likely.

Much more here, including lots of great graphs.