A person buys produce from a fruit and vegetable market stall in central London, Britain, August 19, 2022.
"While the recent focus has been on conditions improving post-Trussonomics, the central picture remains one of a weaker growth, higher borrowing costs and expensive tax cuts that have left a fiscal hole of at least 40 billion pounds to fill," the Resolution Foundation's research director, James Smith, said.
Previous finance ministers had also left a minimum of 12 billion pounds of leeway to achieve their budget goals, the think tank added.Previously the Institute for Fiscal Studies had estimated Britain faced a budget hole of 62 billion pounds in the wake of the tax-cut plan announced by Truss's finance minister, Kwasi Kwarteng, on Sept. 23.
High inflation meant government departments - which mostly have fixed cash budgets - are already facing 22 billion pounds of real-terms cuts by 2024-25, limiting the scope for further savings and creating pressure for extra spending, it added.