Tax hike in line for Britain

THE British government may have to raise taxes to finance spending due to the effects of slower economic growth on the Treasury's income, a new consultancy report suggests.

Ernst & Young LLP used an economic model to predict the government will get £7 billion (€11.1 billion) less than it expects this year in tax revenue a similar problem, although on a different scale, to that faced by Charlie McCreevy as he plans his December budget.

The forecast throws into difficulty prime minister Tony Blair's plans to finance a £100 billion programme to improve schools, hospitals, railroads and police by 2006.