Britain will stick to its plans to slay a record deficit in the budget this month, a senior minister told Reuters on Saturday, indicating there is little, if any, room to support growth via tax cuts or spending.
The Conservative-Liberal Democrat coalition government announced a tough austerity package last year to all but eliminate a budget deficit of about 10 percent of national output by the time of the next election in 2015.
Critics have argued that such a harsh plan, which takes effect in April, may choke off an already uncertain economic recovery, given that the Bank of England seems to be edging towards raising interest rates to tame above-target inflation.
There has been some speculation on financial markets that any extra windfalls for the Treasury, perhaps from any better-than-expected borrowing figures, could be spent on boosting growth rather than paying down the deficit faster.
He indicated those solutions would focus on reducing red tape in areas such as planning and regulation.
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