Belfast Telegraph

Osborne's lead role in Chainsaw Massacre

By Margaret Canning

A prudent pruning exercise or the 11 Downing Street Chainsaw Massacre? The comprehensive spending review is another blow to Northern Ireland's already bloodied and beaten construction sector, but what of the wider economic impact for the UK?

Is the medicine simply too harsh for the delicate patient?

Economists were split over whether the Chancellor was simply doing the needful, or creating a set of conditions which would stifle recovery.

Howard Archer of IHS Global Insight was one economist who did not think the drastic measures were a step onto the double-dipper.

Instead, they were just one of many factors - high consumer debt and global growth in a stupor - which will contribute to "muted growth" for an extended period. "If the global economy suffers serious problems over the next couple of years, then the UK economy could struggle terribly."

Jonathan Loynes of Capital Economics, seemed to think the axe had been wielded with all the subtlety witnessed in cult horror movie The Texas Chainsaw Massacre.

"The sheer scale of some of these cuts casts some doubt on whether they can be realised in practice, particularly if, as we expect, the economy turns out to be significantly weaker than the Office for Budget Responsibility's projections suggest."

And even though the cuts will induce the darkest of pessimism in most quarters, Andrew Smith of KPMG saw Mr Osborne as working with rose-tinted spectacles.

"While spending cuts and higher taxes have their part to play, the resumption of robust growth is crucial to the deficit reduction arithmetic. But the Chancellor is making some rather heroic assumptions. Households may continue to save and pay down debt rather than spend, businesses may remain reluctant to invest and export performance could suffer from a lacklustre global recovery."

James Knightley also pointed out that there was not likely to be enough private sector labour demand to absorb public sector workers facing redundancy under the proposals.

The markets didn't get too excited either way.

The pound also remained pretty stable and ratings agency Fitch said the cuts should help the UK keep its gold-plated triple-A status.

At least one medal of honour for the Chancellor to polish after the most important day of his career.