Tax hikes on the way, says ITEM club

Link: Public finances sink further into the red

A combination of a poor global economy and a structural decline in tax revenues will worry the chancellor, who is running out of options to finance his well publicised spending plans, according to the report.

‘It is not a pretty picture,’ said professor Peter Spencer, Ernst & Young’s economic advisor. ‘The war chest built up in the run up to the last election is already spent, and with borrowing held back by the chancellor’s golden rule, higher spending now means higher taxes.’

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