The Chancellor must resort to "moderate but sustained" tax rises to help repair Britain's battered public finances as she faces missing one of her fiscal rules by more than £40 billion, an economic think tank has warned.The National Institute of Economic and Social Research (Niesr) said weaker-than-expected recent economic activity, U-turns on welfare cuts and forecast-beating borrowing have combined to create a "worsening fiscal outlook".

The Chancellor must resort to "moderate but sustained" tax rises to help repair Britain's battered public finances as she faces missing one of her fiscal rules by more than £40 billion, an economic think tank has warned.The National Institute of Economic and Social Research (Niesr) said weaker-than-expected recent economic activity, U-turns on welfare cuts and forecast-beating borrowing have combined to create a "worsening fiscal outlook".