Britain will still be running a budget deficit at the end of the decade despite plans to return the country to the black, the International Monetary Fund warned last night. The global watchdog said the state will continue to spend more on public services and other areas such as welfare and overseas aid than it raises in tax throughout the next parliament. The projection underlines just how hard it will be for the next government to eliminate the country’s annual deficit, which hit a record £153billion under Labour in 2009-10 and now stands at £90billion. The International Monetary Fund (managing director, Christine Lagarde, pictured) warned Britain will still be running a budget deficit at the end of the decade, despite plans to return the country to the black . The Conservatives have pledged to return Britain to the black in 2018-19 with a surplus of £5.2billion – the first since 2001. David Cameron and George Osborne then plan to run a surplus of £7billion in 2019-20. But the IMF predicted that there will still be a deficit of £7billion that year – even after a decade of austerity. The warning, in the Fund’s Fiscal Monitor report into government finances around the world, will alarm the Tories in particular as they attempt to persuade voters that only they can balance the books. But it also raises the prospect of even higher borrowing under a Labour government. The report warned that ‘uncertainties pertaining to the May elections’ mean spending may not be cut as fast as planned. The Conservatives have pledged to return Britain to the black in 2018-19 with a surplus of £5.2billion – the first since 2001 . Ed Miliband is already planning a slower pace of deficit reduction than the Tories with experts warning he could be borrowing around £30billion a year by the end of the decade. But that figure is likely to be even higher if the IMF is proved right and tax receipts do not live up to current expectations. Vitor Gaspar, director of fiscal affairs at the IMF, said it was crucial for all countries to get their public finances under control. He said governments ‘should build buffers in good times’ – echoing Mr Osborne’s pledge to ‘fix the roof while the sun is shining’. Speaking at the launch of the Fiscal Monitor in Washington, Mr Gaspar said: ‘Countries that fail to build buffers in good times often find themselves without fiscal space to manage a crisis and that is very costly.’ The bleak projections for the UK public finances come despite the IMF hailing ‘solid’ economic growth in the UK. It is now expecting growth of 2.7 per cent this year and 2.3 per cent next year – making Britain the second fastest growing economy in Group of Seven industrialised nations behind the United States.
Projection underlines next government's task to eliminate annual deficit . It hit a record £153billion under Labour in 2009/10 and is now £90billion . Tories pledged to return UK to black in 2018/19 with surplus of £5.2billion . But global watchdog predicts there will still be deficit of £7billion that year .