On Monday this week, the chancellor unveiled a £93bn rise in public spending over the next three years, with big increases for transport, health, education and development.
But, according to the Institute of Fiscal Studies, this would not mean an increase in taxes, as the spending plans are designed to take into account the fluctuations in the economic cycle.
Carl Emmerson of the IFS said: ‘If growth is slower than the chancellor’s forecast, it really doesn’t bother him so long as his view of the long-run trend is the same: slower growth now would just imply faster growth later.’
A more serious threat would come from a long-term slowdown and a continued weakness in world financial markets.
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