'Tax rises are needed to fill £51bn hole in public purse'

CHANCELLOR Rachel Reeves will likely have to raise taxes in the autumn budget to plug a £51 billion black hole in the public finances, a major economic think tank has warned.

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The National Institute of Economic and Social Research (Niesr) said weaker-than-expected recent economic activity, U-turns on welfare cuts and forecast-beating borrowing mean Ms Reeves is on track to miss one of her fiscal rules by £41.2 billion in 2029-30.

It cautioned she faces an “impossible trilemma” of trying to meet her fiscal rules while fulfilling spending commitments and upholding a manifesto pledge not to raise taxes.

Including the need to rebuild the fiscal buffer of just under £10 billion that has been wiped out, she will have to find over £51 billion, according to the group.