Thinktank warns UK economy faces £114bn black hole

The UK's public finances face a funding shortfall of £114bn despite moves by the government to curtail spending, a leading economic thinktank has warned.

The Institute for Fiscal Studies (IFS) said today the sheer scale of the cuts still to come is daunting, with the harshest austerity measures being introduced since the Second World War. It warned despite an expected underspend by government departments in 2011-2012, the hole in the public finances had grown sharply, and by £23bn alone since last March. The IFS said: "Our latest estimates suggest that since the financial crisis and recession began, a £114bn hole in the public finances has become apparent. "This is what caused the Chancellor to pencil in two more years of severe spe...