The next British government will inherit a raft of tax and spending issues, says a think-tank.
Soaring interest rates and weak economic growth paint a bleak picture for the winner of the next general election, expected this year.
The next government will find it "more difficult to reduce debt as a fraction of national income than in any parliament since at least the 1950s,” the the Institute of Fiscal Studies (IFS) said.
An IFS report highlighted the problems opposition Labour Party leader Keir Starmer could face in Downing Street. His party has enjoyed a huge poll lead over Prime Minister Rishi Sunak’s Conservatives for several months.
“Now more than ever, as a country, we face some big decisions and trade-offs over what we want the state to do and how we’re going to pay for it,” IFS Director Paul Johnson told media.
Chancellor of the Exchequer Jeremy Hunt has signaled that he may cut taxes in his spring budget. But the chairman of the Office for Budget Responsibility, Richard Hughes, has accused the government of relying on unrealistic forecasts.
“Those looking to form the next government should be honest about these trade-offs. If they are promising tax cuts, let’s hear where the spending cuts will fall. If they are going to raise, or even protect, spending, they should tell us where taxes will rise,” the IFS director said.