BREAKING NEWS
Kiwi, Aussie hostages released by Nigerian kidnappers ... Read more
Close

2014 Britain's 'year of hard truths'

DANICA KIRKA
Last updated 09:00 07/01/2014

Relevant offers

World

Developing nations may be hit hard by Britain's EU exit Eric Watson: 'Brexit could provide a boon for Kiwi business' Brexit stuns investors, wipes US$3 trillion off stocks Brexit vote strips billions of dollars from UK's richest people Unexpected Brexit triggers Australian dollar fall Asia, US financial market fall as UK votes in favour of Brexit Sterling, stocks in free fall as UK on brink of Brexit British Pound hits lowest in decades, euro drops and yen surges as Brexit slams markets Burger King's latest fast food monstrosity is sadly genius KFC India is giving out boxes of chicken that charge your phone

Britain's Treasury chief offered a dampened view of the economy on Monday, warning that substantial savings must be gleaned from welfare cuts if the country is to eliminate the deficit.

The British economy has been enjoying a stronger recovery than most European countries, but George Osborne noted there are still big underlying problems.

He said 2014 is to be the "year of hard truths" and that the country faces a choice.

"Do we say: 'the worst is over; back we go to our bad habits of borrowing and spending and living beyond our means - and let the next generation pay the bill'?" he said.

Osborne told workers at a Birmingham company that supplies auto components that billions of pounds in welfare cuts will be needed to reduce the deficit, which was swollen by the economic crisis.

The government deficit dropped to 5.2 per cent of gross domestic product (GDP) in the 2012-2013 fiscal year, from 7.6 per cent in the previous one.

His sober message comes in stark contrast to the recent news on Britain's economy.

Though the recovery from the 2008-2009 recession hasn't been electrifying, Britain is doing better than most other major economies around the world.

Its quarterly growth rate of 0.8 per cent in the third quarter is better than Germany's 0.3 per cent and the overall European Union's 0.2 per cent.

At the same time, unemployment has dropped to 7.4 per cent, its lowest rate in 4 years, and inflation has dropped to 2.1 per cent, just slightly ahead of the Bank of England's 2 per cent target.

Ad Feedback

- AP

Special offers

Featured Promotions

Sponsored Content