George Osborne has been praised by a major business chief for a "brilliant Houdini-like trick" by promising "tough" cuts without following it up with "too severe" austerity.
John Longworth, head of the British Chambers of Commerce, said that the Chancellor had "pulled off a brilliant Houdini-like trick" in his approach to making cuts.
He told the BCC's annual conference: "In the last few years, he has talked tough on deficit reduction, but to his credit he hasn't actually applied deficit reduction too severely."
"The next stage of debt reduction will require more belt-tightening, possibly even real austerity in some quarters."
Osborne has since last year boasted of having cut the UK's deficit by a third thanks to the government's "tough" decisions and spending cuts programme.
Longworth argued that Osborne's cuts agenda was not as severe as that seen in countries like Greece and Spain and it helped keep the confidence of the markets.
He said: 'Thanks to this balancing act, he has successfully kept the confidence of the global markets while avoiding the social strife that characterised the 1980's. He has bought the time needed to restore growth to the economy.," he said.
Experts back up Longworth's analysis about Osborne's failure to make actually severe cuts. City broker Tullet Prebon said claims of economic austerity were a "bare-faced deception", pointing out that official Treasury numbers showed real public spending was just £8 billion (1.1%) lower in 2011-2012 than in 2009-2010.
Jonathan Portes, head of the National Institute of Economic and Social Research, blogged on the Huffington Post UK about how the government tried cutting investment in the first few years, but saw that it held back the recovery.
"These sources of deficit reduction stopped in 2011-12, because the government belatedly realised that cutting investment was a major mistake and that the economic imperative was actually to do precisely the opposite (not that there was much investment left to cut); and it stopped putting up taxes overall," he wrote.
"When deficit reduction stalled, the government had a choice: when in a hole, should it, as its original plan suggested, keep digging? To its credit, the chancellor's answer was no; the fiscal framework was abandoned, and the timetable for debt and deficit reduction allowed to stretch."
Longworth also called for business friendly and "economically literate" politicians in order to safeguard a sustainable economic recovery.