Welfare cuts not ruled out as economy slumps 8.5%

TAOISEACH Brian Cowen refused to rule out cuts in social welfare payments as figures showed the economy had suffered its biggest fall on record.

The economy shrank by 8.5% in the first quarter of this year compared with the same period in 2008, the Central Statistics Office figures revealed.

This underlines the scale of the challenge facing the Government as it aims to cut public spending by €4 billion in the December budget.