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In next week’s Autumn Statement the Chancellor may have to abandon one of his fiscal targets – that debt should be falling in 2015–16. He may also need to announce yet more spending cuts or tax increases for the next parliament in order to continue to meet his other fiscal target. This is the headline conclusion of a new report published today by researchers at the Institute for Fiscal Studies. The analysis adjusts the Office for Budget Responsibility’s (OBR’s) March 2012 forecasts for the economy and the public finances in the light of new developments over the last few months. It takes account of the now weaker outlook for the UK economy (as implied by independent forecasters) and the disappointing trend in tax revenues seen over the last seven months.
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Recent IFS Press Releases
Public sector workforce shrinking fast: further reductions could be up to 30-40% outside of education and NHS