Boris Johnson's tax plans face squeeze as public finances worsen

OBR forecast means tax rises rather than tax cuts will be needed, say analysts

The scope for significant tax cuts in the new government's budget has been reduced after gloomier predictions for the public finances from the Treasury watchdog showed higher levels of public borrowing and a deterioration in the British economy.

The Office for Budget Responsibility (OBR) warned that government borrowing was on course to be about 20bn higher than previously expected in each year to 2023-24, dramatically cutting the government's room for manoeuvre after Boris Johnson's election victory.

Related: The Tories need to turn on the spending taps in the north now | Larry Elliott