No budget giveaways in store, says Osborne
REUTERS LONDON THERE will be no scope for any unfunded giveaways in this year’s budget, Chancellor George Osborne said, warning that Britain needs to keep the trust of financial markets by sticking to its deficit reduction plan.
Osborne is facing growing calls from within the coalition government to ease up on the pace of fiscal consolidation to boost the faltering economy, and cut taxes to stimulate growth in his March 21 Budget.
In a speech to manufacturers on Tuesday, Osborne will say the budget deficit is still too high and will argue that any let-up in the plans could raise doubts on markets about the government’s commitment to cutting borrowing.
Britain enjoys record low borrowing costs on its debts, despite having one of the highest budget deficits of any developed economy, helped in part by the Bank of England’s massive bond purchases to stimulate the economy and by demand from investors seeking shelter from the crisis-hit euro zone.
“I can tell you: we are not going to put that credibility and stability and low interest rates at risk,” he will say.
“The days of unfunded giveaways are over - they’re not coming back in this budget. Everything has to be paid for.”