Gordon Brown has refused to rule out tax rises in the next three years a day after a prominent international trade organisation warned the chancellor needs to increase taxes by £10 billion.
Appearing this morning on BBC Radio 4's Today programme, Brown declined to disqualify the claim from the Organisation for Economic Co-operation and Development (OECD), which said the current economic slowdown will force his hand.
In its annual report, the OECD revised the UK's growth forecast down from 1.9% to 1.7% for this year and said the sluggish growth means that Brown will have to either raise taxes, cut public spending or borrow more money.
The £10 billion tax hike would tack an extra 3p on the basic rate of income tax, and the report warned it could even be as high as £12 billion.
The study also criticised the UK's 'poor' productivity rate, 'mediocre' innovation and asked why the public sector has accounted for half of all the new jobs created since 2000.
Brown dismissed the assessment and pledged that his spending programmes are 'affordable'.
When pressed about the issue of taxation, Brown said neither he, nor even the Conservative Party at the last election, could make any 'absolute promises about these issues.'
Meanwhile, Brown warned the European Union it must make essential economic reforms to stay ahead in the global competitiveness race.
Assuring listeners the country's finances are sound, the chancellor said the greatest economic threats come from the rapid rise of China and India.
Europe is falling behind in skills and enterprise, he said, and he urged the EU to face up to the challenges.
