November 23, 2017 / 1:15 PM / a year ago

UK unlikely to balance budget by mid-2020s - IFS's Johnson

LONDON (Reuters) - Britain has only a “remote” chance of balancing its public finances by the mid-2020s, as sought by the government, and reversing the fiscal damage from the financial crisis will take more than 40 years on current plans, a leading think tank said on Thursday.

The Institute for Fiscal Studies said Chancellor Philip Hammond’s budget on Wednesday fell into a familiar pattern of looser policy in the short-term while promising deeper cuts several years ahead.

“Taking the figures at face value would probably be a mistake, though. As the realities of 2022-23 hove into view, the purse strings are likely to be loosened once again,” IFS director Paul Johnson said.

“The chances of getting to budget balance by the mid-2020s look remote,” he added.

The IFS said that based on current rates of debt reduction and sluggish official economic growth forecasts, Britain would not cut debt as a share of gross domestic product back down to its level before the 2007-08 financial crisis until the 2060s.

“This assumes no recessions for the next half century,” Johnson added.

Reporting by Andy Bruce and David Milliken; Editing by William Schomberg

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