Spending Review: An analysis of the cuts

Today's cuts, which will shape the course of the economy over the next four years, are the deepest since the early 1920s and follow the longest and deepest slump in output since WWII. "It is a hard road," the Chancellor said, "but it leads to a better future." Bulls - like the MPC's Andrew Sentance - argue the 1.2% GDP jump in the spring, the strongest quarterly rise in nine years, shows the economy is responding to the stimulus provided by the BoE's historically-low base rate, a budget deficit of 11% of GDP, a £200bn QE programme and a 25% depreciation in the value of the pound. B...