The 'black hole' Osborne needs to fill

George Osborne's budget this afternoon marks an attempt to plug a massive financial hole.

Speaking to the BBC last weekend, he said that the outlook for the global economy has worsened over the last few months, and that he will now need to make further cuts to public spending to meet his goal of getting Britain's public finances into surplus by 2020.

It was always a tall order, with the UK having only managed to run a surplus in eight of the last 60 years - and the current state of the economy makes it even harder.

With slow growth to the economy and low wage inflation, the Treasury's tax take is down - while Osborne's figures depended on UK wages growing noticeably. Meanwhile, inflation fell to zero in the last quarter of 2015, the lowest figure in 55 years.

Nor have matters been helped by the government's failure to sell up to £6 billion of Lloyds shares early this year, after market uncertainty hit the share price hard.

As a result, the Centre for Economics and Business Research has estimated that Osborne could have £45 billion less to play with than he expected.

On the up side, low inflation has cut interest payments on many of the government's debts - but this is small beer in comparison.

"Having set himself a very inflexible target to get to budget balance by 2019–20, Mr Osborne could be forced into additional spending cuts or tax rises if economic and fiscal forecasts again turn out unfavourably," comments the Institute of Fiscal Studies in a recent report.

"He also has some big promised tax cuts to finance, faces considerable uncertainty over key tax revenues, and may yet find the spending squeeze hard to maintain, even though it is less severe than previously expected."

In order to balance the books as he's promised, Osborne will need today's measures to shave an extra 0.5% off projected public spending by the end of the decade. It may not sound like much - but many people believe that Osborne's cuts are already too close to the bone.