A think tank has recommended council tax reform and "sustained" tax increases to help cover a £41.2billion hole in chancellor Rachel Reeves' finances.
The National Institute of Economic and Social Research (Niesr) said the government is miss its own target on borrowing by a staggering £41.2billion.
To make up the shortfall, the BBC reports, Niesr has recommended a "moderate but sustained increase in taxes", including a shakeup of the current council tax system.
When she was first appointed chancellor, Reeves laid out two "non-negotiable" rules; that borrowing must only be for investment and not day-to-day spending, and that debt must be falling as a share of national income within five years.
Stephen Millard, deputy director for macroeconomics at Niesr, said Reeves "will need to either raise taxes or reduce spending or both in the October Budget if she is to meet her fiscal rules".
Niesr said raising taxes would provide a "buffer" and help boost investor confidence in the UK's finances.
The think tank said the £41.2billion shortfall had been exacerbated by recent weakening growth, resulting in lower income from taxes, and the reversal of the planned cuts to welfare which had been hoped to save £5.5billion.
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