UK budget deficit may exceed 5 billion dollars: Resolution Foundation

According to experts of the Resolution Foundation think tank, UK Finance Minister Rachel Reeves may fail to meet the budget adopted for the current year. The expected deficit could amount to 4.4 billion pounds ($5.7 billion).

Analysts at the organization have called on Reeves to handle any cuts to social security spending with caution. The cuts are expected to be the subject of her budget update speech on March 26. Instead of reducing spending, the organization's analysts believe tax increases would be more appropriate.

According to James Smith, director of research at the Resolution Foundation, the UK's economic outlook has deteriorated significantly since the budget was passed last fall. In his opinion, weakening GDP growth and rising interest rates will lead to a shift in the budget balance from the current surplus to a deficit of about 5 billion pounds.

Reuters reports that Britain's Office for Budget Responsibility is planning to drastically cut its forecast for the country's economic growth for 2025, now estimated at 2.0%. Last month, the Bank of England lowered its forecast to 0.75%. The Resolution Foundation is forecasting a similar figure.