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The advice from the researchers comes a day after leaked Treasury documents suggested Philip Hammond would have to fill a multi-billion pound black hole because of the “severe worsening of public finances” caused by Brexit.
In the latest warning, economists at the Foundation applied the average change in independent economic forecasts to the latest OBR projection from March 2016.
They found that this would leave an £84 billion additional borrowing across the five year forecast period to 2020-21. The annual gap would be £23 billion by 2019-20.
The leaked Treasury documents warned of an annual £16 billion gap next year – suggesting Treasury economists broadly concur with the direction of the Foundation’s figures.
The Foundation economists note that trying to close the black hole with more spending cuts or tax rises in the face of new economic headwinds could depress growth even further.
Matt Whittaker, chief economist at the Resolution Foundation, said:
“Despite the long-term impact of Brexit remaining very uncertain at this stage, there is a strong consensus among economists that post-referendum uncertainty will lead to deterioration in the public finances, which were coming in below expectation even before the referendum.
Full article on The Independent