Is Osborne going to 'keep money back for rainy day'?

The government appears to be gaining control of the public finances and could benefit from an £8bn windfall this year due to higher tax revenue and lower spending, a report suggests.

The Ernst & Young Item Club forecast public borrowing for the year to the end of March to be lower than expected.

But it argued that the government should not water down its planned spending cuts.

"So far, the fiscal plan is on track, which is good news for the chancellor," said Andrew Goodwin, senior economic advisor to the Item Club.

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