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UK Conservatives warn of more austerity, hard recovery

By REUTERS

OCTOBER 7, 2012 03:58

BIRMINGHAM, England - The ruling Conservatives warned Britain on Sunday to brace for further austerity, underlining the tough task facing Prime Minister David Cameron to heal a sickly economy and build support among cash-strapped voters before an election in 2015.

Cameron's finance minister, George Osborne, said Britain would have to tolerate more spending cuts after a weaker than expected economy this year. He delivers economic growth and borrowing forecasts to parliament on Dec. 5.

Analysts say Cameron, whose party is languishing behind a resurgent Labor opposition in opinion polls, will struggle to win an outright majority in 2015 unless the austerity plan comes good and the economy bounces back.

The Conservative-led coalition has presided over a return to recession this year, meaning cuts may have to drag through much of the next parliament or even run deeper than originally planned to eliminate a record budget deficit.

"The economy is healing. But it's a longer and harder road that we have to travel down," Osborne said in an interview with the Mail on Sunday. "There will have to be further cuts."

The government says it must keep its resolve to slash spending to safeguard Britain's low borrowing costs. Abandoning their austerity plan would also prove politically disastrous for the Conservatives, who staked their 2010 election pitch on it.

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