Tax hikes and spending cuts 'inevitable' after election

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.

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