British government reveals improved budget

24 Mar, 2010

Britain’s Labour government set the stage for the coming general election on Wednesday with a revised budget forecast that shaves 11.1 billion pounds (12.4 billion euros, $16.7 billion) off its record deficit. The budget includes a one-off growth package for the economy worth 2.5 billion pounds. Britain’s borrowing for the 2009/2010 fiscal year is still 166.5 billion pounds, or 11.8 percent of its GDP. This is not much less than the 12.7 percent deficit that desperately struggling Greece is expected to reach this year. Last week the European Commission criticized Britain and other major EU powers for being over-optimistic about their deficit reduction chances and set a deadline of 2015 to bring deficits below the EU-limit of three percent. Prime Minister Gordon Brown’s Labour Party remains behind in opinion polls, but has steadily gained on the Conservatives in recent weeks. Darling’s budget also included a measure requiring the partially state-owned banks Royal Bank of Scotland and Lloyds to provide 94 billion pounds in new loans to businesses. The government has come under fire from the opposition and parliamentary committees over its handling of bailed-out banks. “The biggest risk to our recovery is five more years of this prime minister,” – David Cameron, Conservative leader Credit: dw-world/hf/AP/Reuters

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