Britain could face fresh spending cuts: finance minister

George Osborne arrives for a Cabinet meeting in Downing Street in London on Feb 20, 2016.
George Osborne arrives for a Cabinet meeting in Downing Street in London on Feb 20, 2016.PHOTO: REUTERS

LONDON (AFP) - Britain's government may have to impose fresh public spending cuts in next month's budget, its finance minister warned on the fringes of a G20 ministerial summit which ended Saturday (Feb 27).

George Osborne had slowed the pace of austerity cuts in his last spending review in November but has now indicated fresh reductions are on the cards in the March 16 budget.

He made the comments to the BBC in Shanghai, where G20 finance ministers were holding a meeting which warned of an "uneven" global economic recovery".

"The storm clouds are clearly gathering in the world economy and that has a consequence for lots of countries including Britain," Osborne said.

"Now, we are weathering it better than most but we've just had confirmation that our own economy is not as big as we had hoped.

"So we may need to undertake further reductions in spending because this country can only afford what it can afford and we will address that in the budget." Official figures out Thursday showed that Britain's economy slowed sharply last year.

Gross domestic product - the total value of all goods and services produced by a country's economy - expanded by 2.2 per cent last year, down from 2.9 per cent in 2014.

Britain's economy faces headwinds from slowing Chinese growth and problems in the economies of countries of the European Union.

It also faces uncertainty ahead of a referendum on June 23 on whether to leave the EU.

In the communique from the G20 meeting, ministers warned that a British exit from the EU would be a "shock" that ranks among rising downside risks and vulnerabilities for the world economy.