Chancellor George Osborne will present a new set of government growth and borrowing forecasts on Tuesday which have been prepared by the independent Office for Budget Responsibility (OBR), and are forecast to show sharply lower growth.

The ITEM Club -- an economics research team sponsored by accountants E&Y -- said the OBR was likely to pencil in 500,000 public sector job cuts between 2010-11 and 2015-16 for the government still to be able to meet its borrowing targets. This is up from a 400,000 estimate in March.

"The OBR had forecast that only 20,000 general government jobs would be lost in 2011-12 but, just one quarter into the financial year, the number of job losses already stands at 147,000," the ITEM Club said.

"Given that the worst of the spending cuts are still to come ... we would expect to see the OBR increase its estimates of general government job losses between 2010-11 and 2015-16 from around 400,000 to closer to 500,000," it continued.

Reuters