George Osborne denies more cuts or taxes will be needed to balance books

George Osborne has played down suggestions he will be forced to find more spending cuts or put up taxes in order to balance the books by the time of the next general election.

The Chancellor was forced to announce tens of billions of additional borrowing in the Budget on Wednesday after the Office for Budget Responsibility (OBR) sharply downgraded its outlook for the economy.

The Institute for Fiscal Studies (IFS) warned that any further deterioration in the public finances would mean he would be forced to make "genuinely big" tax rises or spending cuts.

Mr Osborne, however, insisted he would be able to meet his self-imposed target of delivering a budget surplus by the time of the election in 2020 - although he acknowledged he would have to "alter" plans if there was another recession.

"We have got to hold to the course that we have set out," he told BBC One's Breakfast programme.

"A completely independent body which everybody respects - the Office for Budget Responsibility - has looked at those plans and it says, 'If you hold to the course, you deliver those plans, if the economy grows as expected, then we will have a surplus towards the end of the parliament'.

"We wouldn't need anything extra like more spending cuts or more tax increases."

But appearing later on BBC Radio 4's Today programme he stressed that the commitment applied only if the economy was growing and was not in recession.

"There is a commitment to reach a budget surplus in normal times," he said.

"I'm saying if the economy is growing, if your economy is performing, you should be making sure you don't spend more than you raise in taxes and you should be putting aside money to reduce debt.

"Obviously, if you are in a much worse situation, if you are in a recession for example - and we're not at all in that today, our economy is growing and unemployment is falling - but if you are in a recession then you have to alter your plans."

IFS director Paul Johnson said Mr Osborne had only been able to make the figures add up by "shuffling money around" and had little room for any further manoeuvre.

"Within his very tight rule he will probably get away with this this time round. But there's only about a 50-50 shot that he's going to get there," he told the Today programme.

"If things change again, if the OBR downgrades its forecasts again, I don't think he will be able to get away with anything like this. I think he will be forced to put some proper tax increases in or possibly find some yet further proper spending cuts.

"I think this is going to be the last chance he gets to move things around like this without doing anything genuinely big to the public finances."

The Resolution Foundation think tank said that in order to meet his target, the Chancellor would have to cut borrowing by £32 billion in 2019-20 - the biggest cash consolidation ever achieved in a singe year.

"By increasing spending through expensive and poorly targeted tax cuts, the Chancellor has created a herculean task of reducing borrowing by £32 billion in a pre-election year," said its chief economist Matt Whittaker.

"It is hard to see a government seeking to build a pre-election feel-good factor delivering a consolidation comparable to that seen during the Chancellor's first two years in office."