UK 'could face austerity until 2018'

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The chancellor may have to extend the squeeze on public spending until 2018 if the recent deterioration in growth prospects and tax receipts turns out to be permanent, a think tank has said.

The Institute for Fiscal Studies said George Osborne may have to find another £11bn from tax rises or spending cuts if the economy does not pick up.

This is on top of £8bn of cuts already mooted in the Budget.

Gemma Tetlow of the IFS, told the BBC the chancellor may have to announce yet more fiscal austerity on top of what has already been announced.

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