UK Chancellor To Delay Measures To Slash Budget Deficit: Report

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UK Chancellor Alistair Darling is expected to raise taxes on the high income group, but he would be reluctant to take tough tightening measures to reduce the surging budget deficit, the Financial Times reported Friday citing officials. Darling will make his Pre-budget statement on December 9.

"We don't anticipate any dramatic fiscal tightening," the FT reported citing an official close to the preparations for next Wednesday's statement. Darling assessed that it is too early to announce a substantial fiscal tightening as it is the only G20 nation that still remains in recession. But, Darling would seek to reassure the markets by declaring steps to cut the deficit in coming years.

Further, a fiscal responsibility bill will be announced outlining detailed measures to reduce the deficit to 5.5% by 2014. Also, the bill will give details of how the chancellor arrives at his forecasts.

According to the FT report, the chancellor is set to upgrade this year's GBP 175 billion deficit estimate "by a few billion pounds". However, Treasury officials are confident the deficit will come in well below GBP 200 billion.

(Market News Provided by RTTNews)