Raising income tax or slashing public spending is the only way Rachel Reeves can balance her Budget, top economists have warned, after grim news on a key economic indicator left her with an extra £20bn in what was already a sizeable black hole.
The chancellor knew she would be facing a difficult Budget on 26 November, with a gap in the finances of between £30bn and £40bn, but she has been dealt a further blow with the decision by the Office for Budget Responsibility (OBR) to downgrade its productivity forecast – a move that was first revealed by The Independent – which means she must find a further £20bn.
