George Osborne is facing a £20bn black hole in the public finances, which means that austerity may have to continue until 2020, according to research by the Financial Times. In a blow to the chancellor, who hopes to run a budget surplus in the next parliament, the research suggests that austerity may have to last a year longer than expected because the government will not be able to rely on economic recovery to eliminate part of the deficit. Osborne is already committed to imposing £25bn in spending reductions between 2016-17 and 2017-18, which would have to include £12bn in welfare cuts. The FT analysis of models by ... (full story)