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Dealing with the deficit 'is taking longer than expected'

 

As Chancellor George Osborne prepares to deliver the 2012 Autumn Statement, he has acknowledged that dealing with the UK's economic deficit is 'taking longer' than originally anticipated.

 

However, the Chancellor has insisted that the UK is making positive progress, with the deficit having been reduced by a quarter.

 

While the Government has ruled out the possibility of introducing a so-called 'mansion tax', Mr Osborne has confirmed that the richest 'will have to bear their fair share', further fuelling speculation that he could announce a cut in the annual tax relief cap on pension contributions, from £50,000 to £30,000.

 

Meanwhile, a separate report from the Institute for Fiscal Studies has warned that austerity measures may need to remain in place until 2018 based on recent economic trends, including higher than expected borrowing figures for October, and the fall in corporation tax receipts that has been witnessed in recent months.

 

The Office for Budget Responsibility will produce its latest economic forecast alongside the Chancellor's Autumn Statement on Wednesday