Osborne: Britain could face fresh spending cuts
British finance minister says the Conservative government may have to impose fresh public spending cuts in next month’s budget.
Visiting Shanghai for a G20 ministerial summit, George Osborne said “the storm clouds are clearly gathering in the world economy and that has a consequence for lots of countries including Britain.”
Osborne had slowed the pace of austerity cuts in his last spending review in November but now he is indicating fresh reductions are on the cards in the March 16 budget.
“Now, we are weathering it better than most but we’ve just had confirmation that our own economy is not as big as we had hoped. So we may need to undertake further reductions in spending because this country can only afford what it can afford and we will address that in the budget,” he told state-funded BBC.
Official figures released on Thursday showed that Britain’s economy slowed sharply last year. Gross domestic product – the total value of all goods and services produced by a country’s economy – expanded by 2.2 percent last year, down from 2.9 percent in 2014, AFP reported.
It also faces uncertainty ahead of a referendum on June 23 on whether to leave or remain in the EU.
In the communique from the G20 meeting, ministers warned that a British exit from the EU would be a “shock” that ranks among rising downside risks and vulnerabilities for the world economy.
The referendum on EU membership has long been a hot topic for discussion in the UK. Pro-Europeans warn an exit could trigger the break-up of the UK by prompting another Scottish independence vote.
Earlier, the Labour leader, Jeremy Corbyn, described the deal which David Cameron negotiated in Brussels as a “sideshow”, but reiterated that Labour would be campaigning to keep Britain in the EU.
But, opponents of EU membership say Britain would prosper outside what they say is a doomed Germany-dominated bloc that punches way below its weight on the world stage.