The Treasury may have to impose taxation levels not seen since the aftermath of World War II if the Government follows through on promises to end austerity, according to a prestigious think tank.

Theresa May’s commitment to loosen Government purse strings has been thrown into doubt by experts at the Institute for Fiscal Studies (IFS) and City economists.

The pledge would require either “substantial tax rises” or economic growth that far exceeds that currently predicted, the IFS said in its so-called Green Budget, a look-ahead at the Chancellor’s statement due on Oct 29.

Without either scenario the Government’s long-running commitment to eradicate the deficit - the gap between its income and spending - by the middle of the next decade makes it impossible to meet the spending required to end austerity, it found.

The deficit stood at £40bn last year, and the Government has already promised to increase spending in some areas such as the National Health Service.

There would be a £19bn black hole in the Government’s finances even if it were simply to maintain spending on public services in real terms by 2022-23, the IFS warned.