Commentary – The macroeconomic implications of the parties’ fiscal plans

As we approach the UK’s General Election this May, the economy, and in particular the path and pace of fiscal consolidation over the next Parliament, will dominate the political debate. As yet, detailed spending plans have only been published for 2015-16. The spending envelopes of the incumbent administration, set out in the Autumn Statement (Office of Budget Responsibility, 2014), run through to 2019-20, but provide us with only a broad overview of how fiscal policy is expected to evolve, with most consolidation delivered through a substantial further reduction in government consumption.