Another economics research firm reached a similar conclusion: "In order to meet her fiscal rules, the chancellor will need to raise taxes and/or cut spending in the fiscal update on 26 March", Capital's UK economist Alex Kerr said.
Chancellor Rachel Reeves is coming under increased pressure to raise taxes or cut public spending as official figures show government borrowing was more expensive than expected, and tax revenue fell below expectations.
Last month the pound weakened and 10 and 30-year borrowing costs soared, causing concern Ms Reeves would break her self-imposed fiscal rules - to bring down government debt and balance the budget by 2030 - or have to up.
Higher inflation and an expectation of higher interest rates for longer in part caused the spike and raised fears the chancellor would have eroded her so-called fiscal headroom - money she could spend while still adhering to her rules.
"We will never play fast and loose with the public finances, that's why we're going through every pound spent, line by line, for the first time in 17 years, ensuring every penny delivers on the country's priorities in our plan for change.
