UK Treasury Chief Slashes Growth Forecasts

LONDON (AP) – Britain’s Treasury chief George Osborne says the U.K. economy is taking longer than expected to recover and has warned of more spending cuts to get the country’s public finances under control.

Osborne told lawmakers Wednesday that a paltry recovery and a downturn in Europe will mean that the country’s economy would grow by 1.2 percent next year, down from the 2 percent it predicted in March.

The minister’s target for public sector debt to start dropping as a percentage of GDP by 2015-2016 has also been pushed back a year.

As a result government spending will be cut a further 1 percent next year and 2 per cent the year after.

However, Osborne also said he would crack down on tax avoidance and provide further incentives for business investment.