Domestic economic woes will wreck Reeves’ budget plans, says thinktank

The NIESR has argued that the problems faced by Britain’s economy this year are largely self-inflicted. Photograph: WPA/Getty Images

Slow growth and persistent inflation will wreck Rachel Reeves’ budget plans and increase the likelihood of further tax rises in the autumn, according to forecasts by a leading economic thinktank.

The National Institute of Economic and Social Research (NIESR) said the UK was on course to suffer a long period of stagnation, cutting tax receipts and forcing the chancellor to balance the books only months after a tough budget in March that reduced welfare benefits.