Big investment means cuts elsewhere, economist warns

 Big investment means cuts elsewhere, economist warns

Back over to Radio 4's Today programme to hear from Paul Johnson, director of the Institute for Fiscal Studies (IFS) - an economic research group.

He says today's Spending Review will include a "big increases" in capital investment - including funding for infrastructure, or building new schools, hospitals and roads.

But cuts are also inbound, he says, "given the largesse" in spending in these areas.

Looking ahead to the autumn Budget, the concern, he says, is that if the economic forecast "moves at all in the wrong direction, we will need more tax rises".

Government borrowing – which is the difference between how much it spends and how much it raises from taxes – grew to £20.2bn in April.

That was £1bn higher than the same month in 2024, and more than some economists expected.

Although tax revenue increased in April, notably as a result of the increase in the amount of National Insurance Contributions (NICs) paid by employers, so did spending.

This was largely because of increases in pensions and other benefits and other pay rises as well as higher borrowing costs.