The IFS has challenged chancellor Philip Hammond to find £15bn to ensure he hits his goal of balancing the UK's books

Mark Sands
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The UK will head to the polls on 8 June. (Source: Getty)

Chancellor Philip Hammond has been challenged to find £15bn in savings to balance the UK’s books by 2022.

Figures from the highly-respected Institute for Fiscal Studies said Hammond must find the cash through either tax rises or spending cuts over the next five years.

Hammond had planned to eradicate the UK’s deficit by the end of the next parliament, but the decision to move for an early General Election means the next parliament will now end in 2022.

As a result, the think tank said that he will need to find extra cash to stick to the vow.

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The IFS also said the deficit has now returned to pre-crisis levels, although this remains above the UK’s pre-crisis average.

Both tax revenues and spending are now slightly above their pre-crisis shares of national income, it added.

Revenues are forecast to continue growing to their highest level since 1986–87.

Responding to the figures, Hammond said: “As the IFS acknowledge, we have made good progress in cutting Labour’s deficit by two thirds so we get back to living within our means and securing our economy for the future.”

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Last week, the Office for Budget Responsibility said the chancellor is on track to meet his target of reducing the deficit to below two per cent of GDP by the 2020-21 financial year.

The deficit is expected to rise next year to reach three per cent of GDP, after falling to 2.6 per cent this year, raising the incentive for Hammond to raise taxes following this summer’s General Election.

However, the OBR also warned it did not expect the chancellor to meet his target of balancing the books by 2025.

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