IFS Warns Chancellor of £22bn Budget Black Hole: Be Bold or Face Future Tax Hikes

Reeves Urged to Make Budget "Bold" or Risk Future Tax Rises The Institute for Fiscal Studies (IFS) has warned Chancellor Rachel Reeves that she must be "bold" in next month's Budget to avoid future spending cuts and tax rises. The IFS projects a £22bn shortfall in the government's finances, which will "almost certainly" require tax increases. According to the IFS, finding this amount would allow the government to maintain its 10bn headroom, but there is a "strong case" for increasing it beyond this amount. IFS director Helen Miller said that operating with such tight headroom brings instability and could leave the chancellor "limping from one forecast to the next". The IFS has criticized Reeves' decision to operate with minimal headroom, saying she would have known that run-of-the-mill forecast changes could blow her off course. The warning comes as the government faces a significant budget shortfall. Timeline: Next month's Budget is scheduled for [insert date] The IFS projects a £22bn shortfall in the government's finances The chancellor must find this amount to maintain 10bn headroom Immediate Impact and Response: The warning from the IFS has sent shockwaves through financial markets, with sterling falling against major currencies. The opposition has also seized on the news, calling for a more "bold" approach to the Budget. Background Context: The UK's public finances have been under pressure in recent years, with rising debt and a shrinking economy. The government has built up 10bn headroom into its system, but the IFS warns that this is not enough to cover future shortfalls. What Happens Next: Reeves will now face intense scrutiny as she prepares for next month's Budget. The IFS warning has added pressure on her to make significant changes to avoid future tax rises and spending cuts. *This story is developing. Information compiled from Bbc reporting.*