Think tank: '2p rise necessary to fill £50bn gap'

THE Chancellor must plug a £50 billion black hole in the nation’s public finances, with at least a 2p hike to the basic rate of income tax likely to be needed, a major economic think tank has warned.

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‘The National Institute of Economic and Social Research (Niesr) has further raised the spectre of tax rises at the upcoming Budget on November 26 as it said it believes Rachel Reeves is on track to miss one of her fiscal rules by £38.2 billion in 2029-30.

‘This is before the near-£10 billion needed to rebuild the fiscal buffer that has been wiped out, Niesr says.

In it latest economic outlook, Niesr said it believes the UK's independent fiscal watchdog, the Office for Budget Responsibility (OBR), will predict a smaller deficit of about £20 billion when its latest forecasts are published alongside the Budget.