UK Economy has a big black hole emerge

Big black hole emerges in UK economy

Fri, 07 Dec 2012 13:52:18 GMT
http://edition.presstv.ir/TextOnly/detail.aspx?id=276711

Millions of Britons will have to pay more taxes or face more spending cuts to plug the £27 billion black hole in public finances after the next election, said Britain’s leading economic think-tank.

According to the Institute for Fiscal Studies (IFS), the Chancellor George Osborne may have to raise taxes by £7 billion and enforce another £20 billion in spending cuts in the three years after the 2015 election.

The IFS’s forecast on public finance changes was released alongside the Chancellor’s Autumn Statement yesterday which showed the sluggish growth would leave the country’s ailing economy 3.6% smaller than expected.

The Chancellor will need to find another £27 billion in 2017 following changes to public finance forecasts released alongside the Autumn Statement, according to the IFS.

“Further tax increases or welfare cuts will have to be seriously considered by the next government”, said Rowena Crawford, of the IFS.

The warning follows the announcement yesterday which suggested in the three years to 2017/18, unprotected departments from the spending cuts could face reductions in the absence of welfare spending and tax rises.

Painful austerity measures have been imposed on Britons since the coalition government took office in May 2010.

The country’s economy has gone through a double-dip recession since then, with a triple-dip recession more likely now.

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