European Commission tells Britain to cut budget deficit

The European Commission today challenged Britain’s public finances when it said it expected a deficit of 3.1 per cent of gross domestic product in 2006-07 - contrary to the forecast chancellor Gordon Brown made last month.

The EU executive said Britain’s budget deficit broke EU rules in 2004-05 for a second year in a row by running a deficit of 3.3 per cent when the economy was growing.