Gloomy view on UK economy says government spending on welfare may need to be higher than Treasury plans, while lower tax receipts will undermine growth
Britain’s next government will face a tougher time than expected reducing Whitehall’s annual spending deficit, according to the International Monetary Fund, which said lower tax receipts and uncertainty surrounding the election would undermine growth forecasts.
The Washington-based organisation said the current prediction of a £7bn surplus in the last year of the next parliament would instead be a £7bn deficit. The forecast blows a hole in George Osborne’s hopes that keeping to strict public spending limits for the next five years will deliver a surplus.
High public debt levels pose headwinds to growth
Related: IMF chief hails UK economic recovery
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