UK budget deficit could be £40bn in 2020, academics warn

Ahead of chancellor's autumn statement, City University report says Treasury has underestimated impact of welfare and department cuts

George Osborne could be forced to borrow billions of pounds more than forecast by 2020 if he sticks with spending cuts that will hit economic growth, according to a report by City University.

With only days to go before the chancellor's autumn statement, the report says the Treasury has underestimated the impact of welfare and departmental spending cuts on the broader economy and especially cuts to public sector investment.

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