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UK economy slows to crawl

Tuesday, November 29, 2011 - 02:12

Nov. 29 - Britain's coalition government unveiled sharply lower economic growth forecasts on Tuesday and said it would take much longer than hoped to wipe out its deficit. Hayley Platt reports.

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Britain's finance minister George Osborne had little good news for the UK economy when he delivered his autumn budget statement. The independent watchdog that he set up confirmed he'd missed his growth target and the economy risked being dragged into recession. SOUNDBITE: British Finance Minister, George Osborne, saying (English): "If the rest of Europe heads into recession it may prove hard to avoid one here in the UK." The UK's growth forecast has now been cut to 0.7 percent from 2.5 percent in March. And borrowing will remain higher than hoped for the next 5 years. SOUNDBITE: British Finance Minister, George Osborne, saying (English): "We will do whatever it takes to protect Britain from this debt storm while doing all we can to build the foundations of future growth." Earlier in the week Osborne announced plans to give a £30 billion pounds boost to Britain's infrastructure using private investments. There was also help for small businesses, in the form of government backed bank loans. But there's was no u-turn on the subject of austerity. SOUNDBITE: British Finance Minister, George Osborne, saying (English): "Borrowing is falling and debt will come down. It is not happening as quickly as we'd wished because of the damage done to our economy by the ongoing financial crisis but we are set to meet our budget rules and we are going to see Britain through the debt storm." The opposition's finance spokesman Ed Balls accused Osborne of a catastrophic error of judgement. SOUNDBITE: Ed Balls, Britain's Opposition Finance Minister, saying (English): "With prices rising with unemployment soaring, families, pensioners and businesses already know it's hurting and with billions of pounds more in borrowing to pay for rising unemployment today we find out the truth it's just not working." Anger over the cuts is growing. Two million public sector workers will strike on Wednesday. And Osborne decision to cap their pay at one percent once a two-year pay freeze ends in 2013 is unlikely to persuade them to call it off. Hayley Platt, Reuters.

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UK economy slows to crawl

Tuesday, November 29, 2011 - 02:12