IFS: budget will be ‘work of fiction’ without clear plan to cover UK spending pressures

The Institute for Fiscal Studies (IFS), Britain’s leading tax and spending think‑tank, has issued a stark warning ahead of the next budget. In its pre‑budget report, the IFS says Chancellor John Healey’s budget risks becoming a “work of fiction” unless a clear strategy is set out to address roughly £35 billion of emerging spending pressures. The institute points to two primary drivers of fiscal strain: the ongoing war in the Middle East, which is rattling public finances, and the lingering damage from higher inflation that has eroded real‑term revenues. According to the IFS, the Chancellor faces a stark choice. He can either top up funding for the government’s existing spending plans, thereby preserving current programmes, or implement deep real‑terms cuts that would need to be spread across the remainder of the decade. The report stresses that postponing these decisions until the next fiscal year would be risky, as the fiscal gap could widen further, limiting policy options. By highlighting the urgency, the IFS aims to push the Treasury to make decisive choices now rather than deferring them. The think‑tank’s analysis underscores the broader political context, noting that the budget will be scrutinised heavily by both opposition parties and the public, who are already feeling the pinch of higher living costs. The IFS calls for transparent, evidence‑based planning to ensure that the UK’s fiscal trajectory remains sustainable and that essential services are not jeopardised by unchecked spending or abrupt austerity measures.