Hammond urged to revise deficit target date

Chancellor Philip Hammond may have to abandon his goal for eliminating the deficit if he wants to find extra cash for public services in next month’s Budget, a leading economic think tank has warned.

The Institute for Fiscal Studies (IFS) said Mr Hammond’s Commons statement on 22 November may be the moment he has to admit it is “no longer sensible” to aim to balance the books by his target date of the mid-2020s.

Such a concession would be another bitter political blow for the Conservatives who have repeatedly put back the date since 2010.

The IFS said that while forecast borrowing had come down slightly since March, the impact on the public finances was likely to be “dwarfed” by downgrades to the Office for Budget Responsibility’s estimates for productivity growth.