George Osborne could be forced to make £7 billion of extra cuts to pay for new spending pledges and a further £10 billion in cuts in 2018/19 as austerity has been extended for a year, the Institute for Fiscal Studies has warned
The IFS said that the Chancellor would need to find £7 billion to fund extra spending pledges confirmed in his Autumn Statement that have been left unfunded after 2015/2016, like free school meals for infants and measures to keep energy bills down.
IFS director Paul Johnson said: "The chancellor continues to make specific promises on spending increases whilst stating that he will keep total spending at the same level. He can't keep doing that."
Previously the Institute for Fiscal Studies found that wages had fallen by more in real terms during the current economic downturn than ever previously recorded.
One-third of workers who stayed in the same post following the recession suffered a cut or freeze in their wages in cash terms in 2010-11, according to analysis by economic think-tank the Institute for Fiscal Studies.
Osborne was accused earlier this year of trying to fiddle the books in his March Budget by the IFS. Paul Johnson said the chancellor wasted civil servants' time by asking them to find a way to allow him to say he will be able to bring borrowing in this year below last year's total - down from £121 billion to £120.9 billion.
"There is every indication that the numbers have been carefully managed with a close eye on the headline borrowing figures for this year. It is unlikely that this has led either to an economically optimal allocation of spending across years or to a good use of time by officials and ministers," Johnson said.
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