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British economy 'leaving intensive care': finance minister

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(Globalpost/GlobalPost)

Finance minister George Osborne will claim the British economy is "leaving intensive care" when he unveils a fresh round of spending cuts, media reports said Sunday.

The chancellor of the exchequer, who will deliver his spending review on Wednesday, is expected to spell out £11.5 billion ($17.7 billion, 13.5 billion euros) of cuts to government ministries following the planned May 2015 general election.

Besides the spending reductions, Osborne is set to announce plans to use the savings to invest in education, science, roads and railways in a bid to "power Britain back into the economic premier league".

"Britain is moving from rescue to recovery," Osborne will tell parliament, according to extracts appearing in reports Sunday.

"But while the British economy is leaving intensive care, now we need to secure that recovery.

"Full recovery won't be easy but I won't let up in my determination to put right what went so badly wrong. We are already making progress: the economy is growing, more than a million new jobs have been created by British businesses and the amount the government has to borrow each year -- the deficit -- is down by one third.

"But there's more we have to do -- it's time for the next stage of our economic plan."

Osborne has come under pressure to invest in capital projects in order to help the fragile recovery and he will give details of "a long-term infrastructure plan".

He was to say: "We're saving money on welfare and waste to invest in the roads and railways, schooling and science our economy needs to succeed in the future."

Britain borrowed less than expected in May owing to one-off factors, official data showed on Friday, boosting Osborne ahead of the spending review.

Public sector net borrowing, a measure of the public deficit, stood at £8.8 billion ($13.6 billion, 10.3 billion euros) in May, the Office for National Statistics said in a statement.

In a speech Saturday, opposition Labour Party leader Ed Miliband has announced that he would not be able to reverse any of Osborne's cuts in day-to-day spending unless it was fully funded from savings elsewhere or extra revenue -- not from more borrowing.

Labour finance spokesman Ed Balls urged Osborne to pump money into the economy now in order to reduce the need for cuts in two years' time.

"More growth now would bring in more tax revenues and mean our public services would not face such deep cuts in 2015," he wrote in the Sunday Mirror newspaper.

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http://www.globalpost.com/dispatch/news/afp/130623/british-economy-leaving-intensive-care-finance-minister