MercoPress. South Atlantic News Agency

EC calls on Britain to further cut the budget deficit: “not ambitious enough”

It’s only a recommendation, but it’s more than that for PM Brown

The European Commission will call on Britain to do more to cut the budget deficit, according to a draft document. The EU executive is also expected to say the UK's medium term plans are not ambitious enough. The report will see the light just weeks before a general election is expected to be announced.

It will publish an official report in two days' time - but a draft has been seen by the Reuters news agency. The document will warn Britain is not on track to cut the deficit to below 3% of economic output by 2014-15.

However, other EU countries are also expected to bust the limit. According to current spending plans, Britain will cut its deficit from 12.1% of GDP in 2010-11 to 4.7% in 2014-15.

The EU is only able to reprimand countries with the euro currency for missing its target - so Britain will not be fined. The report is expected to say Britain's economic plans for 2010-2011 are fine, but spending limits beyond that period have not yet been fleshed out in enough detail.

Both Labour and the Conservatives have said they will publish their intentions in the autumn if they win the next election.

The document concludes that Britain's fiscal plan is “not sufficiently ambitious” and needs to be reinforced. Further “tightening measures” will be needed to make the UK's public finances sustainable, it adds.

A senior UK Treasury source was quoted saying that “The fact is that the UK is cutting its borrowing faster than any other advanced economy, more than halving the deficit in four years.

”Borrowing has risen sharply in all countries as we support our economies through the crisis - which is why the Commission has published similar assessments for France, Germany and 17 other member states. We will do nothing to put our economy at risk.”

According to the latest data UK’s budget deficit as percentage of GDP is 13% and its debt as percentage of GDP, 68.9%. This compares with Greece’s 12.5% and 112%; Spain’s, 11.25% and 54.3%; Ireland, 10.75% and 65.8%; Italy, 5-3% and 146% and Germany, 3.5% and 73%.