Budget 2008: Europe slaps UK on the wrist

The UK’s budget deficit has forced the European commission to begin disciplinary proceedings.

Britain is not in the Eurozone so it cannot be fined, but the hearings will function as a formal warning about the gap between what the country spends and borrows.

The Treasury has insisted it continues to follow “prudent” policies but the European Commission foresees a British deficiet of over three per cent its GDP.

Such a deficit would breach the rules on economic management set down in Europe’s Growth and Stability pact.