Britain is facing a new round of spending cuts in next month's Budget, George Osborne has warned, following "new figures that show the economy is smaller than we thought".
Speaking ahead of the G20 finance ministers meeting in Shanghai, the UK chancellor said Britain "may need to undertake further reductions in spending because this country can only afford what it can afford". His words will send shivers down the spines of senior civil servants who are already struggling to find additional savings after years of deep cuts.
Less than a month before the Budget, Mr Osborne will have a good idea of the shape of the UK's economic forecasts. His unusually explicit comments suggest they do not look good.
The chancellor told the BBC that the government would use the annual financial set piece to "look at public expenditure again" and that his economic principles were that "we must live within our means". He gave no sense of what scale of additional cuts he was anticipating.
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On existing plans, public spending on services other than health is set to reach its lowest level as a proportion of national income since 1948-49, at a time when Britain's population is expanding and ageing.