Public services braced for huge cuts as Liz Truss abandons spending review

Budgets were set when prices were expected to rise by just 4 per cent – but inflation is now 10 per cent

Struggling public services face billions more in spending cuts because Liz Truss is set to crush hopes that budgets will be topped up to cope with soaring inflation.

On the campaign trail, the future prime minister suggested she would hold an emergency spending review – with allocations having been made when prices were expected to rise by a peak of just 4 per cent.

With inflation now around 10 per cent, the Institute for Fiscal Studies (IFS) has warned an extra £18bn will be needed in each of the next two years to restore “the real-terms generosity that was intended”.