George Osborne hints at further austerity ahead of budget

He says his hand has been forced by economic headwinds out of his control

George Osborne hints at further austerity ahead of budget

altogetherfool, Flickr

British Chancellor George Osborne is warning of more austerity in this week's budget as he claims the country is facing a "dangerous cocktails of risks."

George Osborne has written an opinion piece in the Sun on Sunday newspaper in which he credits the Government's long-term economic plan for shaving the deficit, shoring up the banking sector and achieving record employment.

But he says the world is "facing its most uncertain period since the Great Recession ... so in the Budget next week we need to take more bold decisions."

The Chancellor says his hand has been forced by economic headwinds out of his control: the slowdown in China, the drop in oil prices, instability in the Middle East and interest rates falling around the globe.

He suggests they have stunted growth in developing nations and dented Britain's productivity, so it would be wrong to start taking risks.

"Now would be the worst time to add to that uncertainty by leaving the EU," he writes.

"Everyone from the Governor of the Bank of England to some of those campaigning for exit admit that exiting would cause a real economic shock."

And then he suggests his sixth Budget, to be delivered in the Commons this Wednesday, will contain more austerity.

"We're going to need to look for more savings in the public spending, so that the country lives within its means," he writes.

"We have got to improve our schools, invest in roads and railways for the future, attract more investment and export more.

"We must do more to help businesses create jobs - especially small firms."

The Chancellor concludes: "We need to act now - rather than pay later."

Critics will contrast his warning with remarks he made before last year's General Election that the "sun was starting to shine - and we are fixing the roof."

The Labour Party has already accused Mr Osborne of racing to run a Budget surplus at the expense of investment and public services.