BRITAIN’S national debt could soar above £2.3 trillion and unemployment could hit 3.8m if the country suffers a “double dip” recession, an independent economic forecaster is warning today.

The Centre for Economics and Business Research (CEBR) warns of a “black hole in the public finances” if the UK economy does not recover as swiftly as predicted by Chancellor Alistair Darling in the Budget in April.

And it said that ministers are likely to have to slash public spending by £45bn in today’s money or £123bn in real terms by 2017/18 – the equivalent of 3% a year for the next eight years – to get the spiralling debt back under control.

The bulk of this belt-tightening is likely to come from public sector cuts, as increases in taxation would reduce Treasury receipts in the long term by driving high-earners and businesses overseas, said the CEBR.

In a report published with campaigning think-tank the TaxPayers’ Alliance (TPA) today, CEBR chief executive Douglas McWilliams says that the most likely outcome was “major public spending cuts”.