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The UK government will be less than half its way through a programme of spending cuts by the end of the financial year, a think tank has said.

Despite the improving economic outlook, 60% of cuts were still to come, the Institute for Fiscal Studies (IFS) said.

Chancellor George Osborne is targeting a budget surplus by 2018-19.

However, additional spending, population growth and extra demands on the NHS meant more cuts were needed.

These would come in addition to the cuts in social security spending already in the pipeline, the IFS said in its annual Green Budget.

“Returning growth, and forecasts suggesting we should be running a Budget surplus by 2018-19, should not lull us into a false sense that all is now well with the public finances,” said Paul Johnson, IFS director.

 

“The outstanding debt will still be very large and the scale of additional spending cuts required to hit that budget surplus remains hugely challenging, especially on top of cuts already delivered.”

The publication comes to a number of conclusions, including:

A view that there is no evidence of a housing bubble in the UK as yet

That economic growth of 2.6% is expected this year

“Little is known” about the effectiveness of planned government spending on childcare

A belief that tinkering with business rates increased “uncertainty and complexity”

The full report comes a week after the IFS published one section of the report, which concluded that average UK living standards had fallen “dramatically” since the recession and would not reach pre-crisis levels by the next election.

The IFS calculated that a mid-range household’s income between 2013 and 2014 was 6% below its pre-crisis peak, but would not fall any further