Chancellor George Osborne could be forced to extend the Spending Review squeeze on Whitehall departments for three years if tax yields fail to recover and borrowing continues to rise, experts have warned.

An Institute for Fiscal Studies (IFS) analysis issued today suggests government debt is on course to increase as a share of national income between 2014/15 and 2015/16 – potentially forcing the Treasury to ditch its fiscal mandate to ensure debt declines between these years.