UK could face tax rises as a result of Chancellor’s ‘inflexible’ budget target, warns IFS
Chancellor George Osborne’s budget targets could require him to raise taxes or make additional spending cuts, according to data contained within the Institute for Fiscal Studies’ (IFS) Green Budget document.
The IFS document is published annually ahead of the Budget in March and highlights the UK’s current economic situation, as well as any challenges facing the Chancellor.
The think-tank has come to the conclusion that Mr Osborne’s pledge to balance the books by 2019/20 was a ‘very inflexible target’.
It could also have significant tax and spending implications in the event of ‘unfavourable’ economic and fiscal forecasts being unveiled, the IFS stated.
A surplus has only been run eight times in the last 60 years.
The Institute’s Green Budget document revealed: ‘Even if the Chancellor gets to the March 2019 Budget with his plans intact, past errors in official forecasts suggest that there would be more than a one-in-four chance that he would need to implement in-year tax rises or spending cuts to deliver a budget surplus in 2019/20’.
The Chancellor will present the 2016 Budget on 16 March.