Britain Tax: Britain told to spend less, tax more
A major ratings agency has warned that Britain will need a more ambitious plan to cut its deficit, hinting that tax rises as well as spending cuts will be needed to tackle the debt burden.
The pound took a hit against the US dollar and the euro after the Fitch agency said Britain faced a "formidable challenge" to cut its public borrowing.
Fitch says both the size of the deficit and the failure to reduce it to three per cent of GDP within five years are striking.
The UK's annual deficit is running at around 11 per cent of national output and the ratings agency said the former Labour government's plans were weak compared with austerity measures announced by Italy, Spain and Portugal.
Britain's chancellor George Osborne overnight invited all politicians, trade union leaders, and members of the public to take part in the debate on how to cut the deficit and ensure that Britain lives within its means.