George Osborne

George Osborne will have to perform a "precarious balancing act" in the upcoming 2016 Budget if he is to eliminate the deficit by the end of this parliament, according to the Institute of Fiscal Studies.

The IFS said this could result in the Chancellor revealing some "big tax rises or spending cuts with very little notice" when he delivers the Budget on 16 March.

Highlighting the fact that the UK has only run a surplus eight times in the past 60 years, the IFS said "unfavourable" economic forecasts could make tax increases and spending cuts even more likely. Last week, the Bank of England cut its growth forecast for the UK economy. And with oil prices remaining low and growth in China still a major concern, Mr Osborne isn't likely to receive a very positive outlook.

In its Green Budget, which is published shortly before the Chancellor's Budget, the IFS said: "The rule has the merit of simplicity and transparency but is very inflexible and this could come at a cost.

"Even if the chancellor gets to the March 2019 Budget with his plans intact, past errors in official forecasts suggest that there would be more than a one-in-four chance that he would need to implement in-year tax rises or spending cuts to deliver a budget surplus in 2019-20."