Budget 2016: George Osborne warns of further cuts to public spending as “hopes of a stronger global recovery have evaporated”
George Osborne has warned that a slowing global economy will mean more cuts to public spending ahead of this week's Budget.
"The hopes of a stronger global recovery have evaporated," he said. "Instead the world economy is slowing."
The chancellor cited China's slowdown, falling oil and commodity prices, political instability in the Middle East, as well as the worst start of the year for stock market's in nearly 50 years as a "cocktail of risks", writing in the Sun on Sunday.
Economists at the Centre for Economics and Business Research have warned that Osborne faces a £45bn spending blackhole, while the Office for Budget Respoinsibility is expected to downgrade its forecasts for growth and inflation.
Read more: Everything you need to know about the Budget 2016
Osborne will need to make further cuts to spending in order to fulfil the government's pledge to reduce the defecit and
"Osborne faces a choice between breaking his fiscal rules and announcing more austerity at a time when the economic recovery is already looking shaky,” economists at Capital Economics said last week.
"My Budget will set out the clear direction we must hold to through the current uncertainty in the world," the chancellor said. "It won’t be easy, but I am determined to make sure that despite the gloomier global picture we keep taking the right decisions to keep Britain prosperous and secure."