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UK vows steps to cut deficit

By Reuters

British Finance Minister Alistair Darling said yesterday he would do more to cut the budget deficit if the economy recovers faster than expected, but that current plans to halve it over four years were adequate.

A group of leading economists this weekend urged the government to start cutting the deficit – set to top 12 per cent this year – more quickly to avoid higher interest rates and currency instability.

The Labour government plans to start tackling the deficit in earnest in 2011 to allow time for the economy to recover.

The Conservatives plan to start cutting the deficit this year if elected, as opinion polls indicate, although tepid growth in the final quarter of last year has led to the party softening its rhetoric.

"My view and my judgment is that halving the deficit over a four-year period, the structural deficit coming down by two thirds, is the right one," he said. "I've gone on to say if the forecasts turn out to be better than I think at the moment then, of course, we can go further."

Prime Minister Gordon Brown has said stronger growth could make more room to protect government spending.


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