Brown dismisses cutbacks claims
The British Chancellor of the Exchequer, Mr Gordon Brown, yesterday dismissed claims his government would have to cut back its public spending plans following the reduction in its forecast for economic growth. Mr Brown insisted the spending plans were "safe".
But analysis by the House of Commons library suggests the downgrade would virtually wipe out the predicted £36 billion sterling budget surplus over the next four years. Any sharper downturn and Mr Brown would breach his "golden rule" for public borrowing.
Mr Brown was yesterday accused of undermining the independence of the Bank of England, the British central bank, and trying to "bully" it into cutting interest rates today.
Mr Malcolm Bruce, Treasury spokesman for the opposition Liberal Democrat party, said: "Mr Brown's blundering political intervention has actually made an interest rate cut less, rather than more, likely." Mr Francis Maude, shadow chancellor, said Mr Brown had put the Bank of England in "an incredibly difficult dilemma" and claimed the forecast downgrade meant there was "a large black hole" of more than £15 billion at the centre of the government's "reckless" spending plans.