IFS warns over Osborne’s autumn statement gamble

 The IFS said it was the first time the chancellor had used the OBR’s revised outlook to fund a giveaway
 The IFS said it was the first time the chancellor had used the OBR’s revised outlook to fund a giveaway
REUTERS

George Osborne’s decision to spend the bulk of the £27 billion windfall from changes to the borrowing forecast in the autumn statement may prove a reckless gamble, the Institute for Fiscal Studies has warned.

The improvement in the public finances over this parliament was not based on a stronger economy but “small changes to very big numbers” that could unravel, Paul Johnson, director of the think tank, said.

The institute added that it was the first time the chancellor had used the Office for Budget Responsibility’s changed outlook to fund a giveaway. In 2011 and 2012, when borrowing was estimated to have risen, he did not respond with deeper cuts. In 2013, when the forecasts improved, he banked the gain to help clear the deficit.