The basic rate of income tax is going to have to go up by 6 pence in order to reduce the budget deficit down to 3% - regardless of which party triumphs next week in the general election.
The National Institute for Economic and Social Research (NIESR) warned that that such a rise would only be part of a range of tough economic decisions that would have to be taken, including an extra £30bn in spending cuts.
Ray Barrell, director of macroeconomic research at NIESR, said: "The crisis has made us 4% poorer. It means we have to assume there is a problem with our spending plans. Increasing debt means we are borrowing from our children and our grandchildren. We need more spending cuts and higher taxes to bring the deficit down.
In its quarterly report, the NIESR criticised...