- Home
- Publications
- Commentary – Light At The End Of The Fiscal Tunnel?
Commentary – Light at the end of the fiscal tunnel?
![](https://www.niesr.ac.uk/wp-content/themes/niesr/assets/img/calendar-alt.png)
![](https://www.niesr.ac.uk/wp-content/themes/niesr/assets/img/chain.png)
![](https://www.niesr.ac.uk/wp-content/uploads/2021/03/3-900x900.png)
Related Themes
Macro-Economic Dynamics and PolicyJournal
National Institute Economic Review
Publisher
Sage Publications, London
External Resources
Issue
244
In his Spring Statement, the chancellor said that he saw light at the end of the fiscal tunnel. We are afraid that this will turn out to have been an illusion. While public borrowing has been reduced to sustainable levels, our analysis of the prospects for the public finances points to severe challenges ahead. Sustainable borrowing has been achieved by cutting back on public services and restraining public sector pay. But ‘austerity fatigue’ is now setting in, and emerging recruitment difficulties and concerns about the quality of public services mean that there are already strong pressures for public spending to rise. On top of that, the demand for public services is increasing sharply to meet the needs of an ageing population. That provides a difficult background for the 2019 Spending Review. With debt already at an uncomfortable level, increasing public spending by substantially more than currently planned would need to be financed with higher taxation or more direct charging for services. The alternative option of continued spending restraint would not be palatable unless government can find significant ways to improve efficiency and get better value for money.
Related Blog Posts
![](https://www.niesr.ac.uk/wp-content/uploads/2024/06/iStock-683963174-1-1-640x640.jpg)
![](https://www.niesr.ac.uk/wp-content/uploads/2024/04/Bank-of-England-640x640.jpg)
![](https://www.niesr.ac.uk/wp-content/uploads/2024/02/iStock-1130124948-640x640.jpg)
![](https://www.niesr.ac.uk/wp-content/uploads/2024/02/Public-Debt-Sustainability-and-Fiscal-Rules-640x640.jpg)
Public Debt Sustainability and Fiscal Rules
Stephen Millard
Benjamin Caswell
05 Feb 2024
4 min read
Related Projects
Related News
![Bank of England Building and Duke of Wellington statue](https://www.niesr.ac.uk/wp-content/uploads/2022/08/Bank-of-England-Building-640x640.png)
![Front of the Bank of England with statue of the Duke of Wellington](https://www.niesr.ac.uk/wp-content/uploads/2023/09/Bank-of-England-Independence-640x640.png)
Letter to the Financial Times: Is Perfidious Albion About to Make a Return?
14 Jun 2024
3 min read
![](https://www.niesr.ac.uk/wp-content/uploads/2024/05/iStock-2013089711-1-1-640x640.jpg)
![](https://www.niesr.ac.uk/wp-content/uploads/2022/08/Call-for-Paper-Kemar-QTQE-1200-×-1200px-1-640x640.png)
Call for Papers: Lessons From Quantitative Easing & Quantitative Tightening
09 Feb 2024
1 min read
Related Publications
![exterior photo of the Bank of England](https://www.niesr.ac.uk/wp-content/uploads/2024/06/iStock-1331969847-modified-09bd29cf-1fae-4789-b36a-b4d3e52f5dab-640x640.jpg)
![](https://www.niesr.ac.uk/wp-content/uploads/2024/05/US_debt_image-640x640.jpg)
Everything You Wanted to Know About the US Budget Deficit and Debt But Were Afraid to Ask
09 May 2024
Global Economic Outlook Box Analysis
![](https://www.niesr.ac.uk/wp-content/uploads/2024/05/recover_resilience_image-640x640.jpg)
To What Extent Has the Recovery and Resilience Facility Supported the EU Recovery from Covid?
09 May 2024
Global Economic Outlook Topical Feature
![](https://www.niesr.ac.uk/wp-content/uploads/2024/01/Duncan-Adam-Smith-and-the-Bankers-640x640.png)
Adam Smith and the Bankers: Retrospect and Prospect
04 Jan 2024
National Institute Economic Review
Related events
![Event Image](https://www.niesr.ac.uk/wp-content/uploads/2024/05/Workshop-Imagery.png)
2024 UK General Election: The Economy and Living Standards
![Event Image](https://www.niesr.ac.uk/wp-content/uploads/2023/12/Cycles-Structural-Changes-Markets.png)
Assessing Cycles and Structural Changes in Markets
![Event Image](https://www.niesr.ac.uk/wp-content/uploads/2023/02/BCF-Imagery-e1702367621405.png)
Business Conditions Forum
With an election expected to take place at some point in 2024, we begin the year by focusing this quarter’s Business Conditions Forum on the following topics: Can we expect…
![Event Image](https://www.niesr.ac.uk/wp-content/uploads/2021/10/Dow-Lecture-2022-social-image.jpg)
2022 Dow Lecture: The Economy and Policy Trade-Off
![](https://www.niesr.ac.uk/wp-content/themes/niesr/assets/img/arrow-right.png)
![](https://www.niesr.ac.uk/wp-content/themes/niesr/assets/img/arrow-right.png)