uk  risks breaking golden rule  the uk government will have to raise taxes or rein in spending if it wants to avoid breaking its  golden rule   a report suggests.  the rule states that the government can borrow cash only to invest  and not to finance its spending projects. the national institute of economic and social research (niesr) claims that taxes need to rise by about £10bn if state finances are to be put in order. the treasury said its plans were on track and funded until 2008. according to niesr  if the government s current economic cycle runs until march 2006 then it is  unlikely  the golden rule will be met. should the cycle end a year earlier  then the chances improve to  50/50 . either way  fiscal tightening is needed  niesr said.  the report is the latest to call into question the viability of government spending projections. earlier this month  accountancy firm ernst & young said that chancellor of the exchequer gordon brown s forecasts for tax revenues were too optimistic.  it claimed revenues were likely to be £6bn below estimates by the end of the tax year despite the economy growing in line with forecasts. a treasury spokesperson dismissed the latest claims  saying it was  on track to meeting spending rules and the golden rule in the current cycle and beyond .  spending plans have been set out until 2008 and they are fully affordable.  other than its warning on possible tax hikes  the niesr report was optimistic about the state of the uk and global economy.  it said the recent record-busting surge in oil prices would have a limited effect on worldwide expansion  saying that if anything the  world economy will continue to grow strongly . global gross domestic product (gdp) is tipped to be 4.1% this year  dipping to 4% in 2005  before picking up again to 4.2% in 2006. the us will continue to drive expansion until 2006  albeit at a slightly slower rate  as will be the case in japan. hinting at better times for uk exporters  niesr said the euro zone  is expected to pick up speed .  growth in britain also is set to accelerate  it forecast.  despite weak growth in the third quarter  the forces sustaining the upswing remain intact and the economy will expand robustly in 2005 and 2006   niesr said  adding that  the economy will become better balanced over the next two years as exports stage a recovery . gdp is expected at 3.2% in 2004  and 2.8% in both 2005 and 2006. the main cloud on the horizon  niesr said  was the uk s much analysed and fretted over property market.