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TheStreet Open House

UK To Deliver Another Austere Budget

By DANICA KIRKA

LONDON (AP) â¿¿ Britain's Treasury chief unveiled another tough budget Wednesday despite weakness in the economy that raised fears of a third recession in a little more than four years.

Though he offered beer drinkers and car drivers a tax break â¿¿ no doubt a popular move among some â¿¿ and provided incentives for home-buyers and investments in infrastructure projects, George Osborne showed the Conservative-led government remains convinced that debt-reduction measures are the best way forward for Europe's third-largest economy.

"We are slowly but surely fixing our country's economic wrongs," he said.

That's not a view shared by all. After three years of austerity, the country is borrowing more than Osborne initially thought and growing far slower than anticipated.

Ed Miliband, leader of the Labour Party opposition, said the budget was "more of the same" from a government that has failed to revive the economy following its deepest recession since World War II and presided over the loss of the country's triple A credit rating from Moody's Investors Service.

"Today, the chancellor joined Twitter," Miliband said. "He could have got it all in 140 characters: Growth down. Borrowing up. Families hit. And millionaires laughing all the way to the bank. Hashtag: downgraded chancellor."

While insisting that his approach was the only way to tackle the economy's problems head on, Osborne conceded that the forecasts from the independent Office for Budget Responsibility were more downbeat than the last set less than four months ago.

The growth forecast for this year, for example, was halved to just 0.6 percent, providing Osborne with even less room to maneuver as a flat-lining economy keeps a lid on revenues and maintains the upward pressure on welfare spending. And though growth in 2014 is expected to triple to 1.8 percent, down from the previous 2 percent prediction, it's still below the country's long-run average and a fairly uncomfortable backdrop to the expected election the following year.

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