Following Gordon Brown's delivery of the 2004-05 budget report on Wednesday, the Institute for Fiscal Studies (IFS) suggested that the UK Chancellor is continuing to cut things fine with regard to his 'golden rule' on public finances, by counting on a significant rebound in tax revenues.
The golden rule stipulates that all non-investment spending should be financed by tax rather than by borrowing.
Speaking last week, IFS director Robert Chote explained to the UK media that:
"As in the past, the Chancellor expects a bounce-back in the public finances above and beyond that explained by any bounce in the economy," and added that: "We remain unconvinced that tax revenues will rebound strongly enough to deliver the improvement the Chancellor is looking for."
The IFS chief went on to confirm that in the opinion of the IFS, the Chancellor will still need to increase tax in order to fund the spending plans unveiled last week.
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