The UK's budget deficit is expected to reach as high as £51.7bn by 2029-30, the National Institute of Economic and Social Research (NIESR) has calculated, putting pressure on chancellor Rachel Reeves to break her campaign promises and raise taxes.
Highlighting the difference between the think tank's August forecast and the Office for Budget Responsibility's (OBR) March forecast, NIESR said the OBR predicted government spending for 2024-25 would hit £1.2trn, but the actual figure was £14.3bn more. To this, NIESR added another £13.7bn in spending from not passing welfare reforms, £1.5bn in extra costs from keeping the winter fuel allowance for pensioners and £22bn more due to slower growth and fewer people working compared to OBR expectations. NIESR director David Aikman said Reeves would have to consider "unenviable decisions" a...
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