. The IFS said: 'Government borrowing in 2027–28 should be 1.4pc of GDP higher than under the OBR's central forecast.' If Chancellors had responded equally to good and bad news on finances, debt at the start of the pandemic could have been as much as 11pc lower than it is now, the IFS said. In February 2020, the month before the first Covid lockdown, the UK's national debt stood at £1.8 trillion. It is now £2.6 trillion.){kind=link}
Having only one fiscal event every year will help at a time of economic volatility, think tank says
Too much government borrowing is undermining faith in official economic forecasts, the Institute for Fiscal Studies has warned.
The think tank said a raft of unexpected and expensive policies rolled out by recent Chancellors had led to a surge in the size of the state and fuelled Britain’s deficit, while also making forecasts less accurate.
Research from the IFS found that when economic news is good, the Government tends to respond with higher spending or lower taxes.
But when the economy moves in the wrong direction, it compensates with extra borrowing instead of tightening the purse strings.