Ending austerity in UK 'incompatible' with budget plan

PAN PYLAS
Britain's Prime Minister Theresa May attends a roundtable meeting with business leaders whose companies are inaugural signatories of the Race at Work Charter at the Southbank Centre in London, Thursday Oct. 11, 2018. (Henry Nicholls/Pool via AP)

LONDON (AP) — A report says the British government will have to spend an extra 19 billion pounds ($25 billion) a year on public services by the year 2022-23 if it's to deliver on Prime Minister Theresa May's promise to end austerity.

In an analysis released Tuesday, the Institute for Fiscal Studies said May's ambition looks incompatible with another major aspiration — to balance the books by the mid-2020s — without substantial tax rises or much stronger economic growth.

Paul Johnson, the IFS's director, says: "This is going to be the toughest of circles to square."

Given that the British economy is being hobbled by uncertainty surrounding Brexit, Treasury chief Philip Hammond is not expected to announce any radical changes to spending in his annual budget statement on Oct. 29.