Institute for Fiscal Studies delivers alarming assessment of the Chancellor's economic plan

* More pain to come after growth proved more sluggish than predicted.
*Austerity may have to last until 2018 or impose an extra £23billion of cuts by 2015-16
* Mr Osborne urged to ditch target for debt to be falling by 2015

The era of austerity could last until 2018 and VAT may have to rise to as high as 25 per cent to help plug the hole in the public finances, the Chancellor was warned last night. Economists said that if George Osborne wants to meet his pledge to cut the deficit, he could be forced to announce dramatic tax increases, or impose further cuts. The influential Institute for Fiscal Studies said the continued sluggishness of the economy means the current squeeze on public spending may have to last until 2018. And it said the Chancellor will be forced to announce even more bad news for taxpayers if he is to meet his debt and deficit targets. Under an even more pessimistic scenario, he would be forced to raise an extra £23billion by 2015/16, which he would have to fund by either imposing further cuts or putting up taxes.....Read more here