As political parties continue to put forward their pledges ahead of the forthcoming General Election, the International Monetary Fund (IMF) has warned that the next Government could face difficulties balancing the public finances, forecasting that the economy will still be in deficit in the final year of the next Parliament.
At the time of the 2015 Budget, the independent Office for Budget Responsibility (OBR) forecast a £7bn surplus for 2019/20.
However, the watchdog has warned that spending on public services and welfare will continue to exceed the amount raised through tax revenues.
According to the IMF there is likely to be a deficit of £7bn remaining in 2020, with lower than predicted growth and tax revenues, and uncertainty surrounding the outcome of the election which could impact on the rate of spending cuts.
Despite its more gloomy long-term projections, the IMF has predicted growth of 2.7% for the UK this year and 2.3% for next year.