Europe tells Britain to cut budget deficit

BRITAIN was told by the European Commission that it must comply with EU rules and cut its budget deficit for the next year.

Chancellor Gordon Brown last month budgeted for a deficit of 3.1% of GDP for 2006/07 which is 0.1% above the limit set by the EU. This will be the third year in a row it exceeds the limit.

There are now 12 of the 25 member states with excessive deficits, 12 of them are new members and five are in the eurozone.