Grim Osborne ready for Britain’s first downgraded Budget

George Osborne has paved the way for his bleakest austerity Budget yet by warning there are more "tough choices" ahead.

The chancellor, who will deliver his fourth Budget from the Commons despatch box on Wednesday lunchtime, used a newspaper article to offer a defiant reply to those who have questioned his 'plan A' of harsh spending cuts and tax rises.

"Turn back now and it will be a disaster," he wrote in a piece for the Sun on Sunday newspaper, adding: "If there were easy options and miracle cures then, of course, I would take them. But, sadly, there aren't."

Business secretary Vince Cable is the most senior member of the government to publicly question the chancellor's uncompromising approach to the economy, which could be slipping into a triple-dip recession by the end of the month.

Osborne is expected to use his Budget to outline more details of the extended austerity period in the next parliament. The Conservatives and Liberal Democrats are to conduct a one-year spending review continuing their deficit reduction drive throughout the 2015/16 tax year.

"At the Budget I'll set out the scale of the savings we need to find — it won't be easy," he added.

"Reducing spending will mean more tough choices in the months ahead. Families understand that — when money's short, they're having to make tough choices with their own budgets.

"But it's the right thing to do because the alternative would be so much worse. If the world thought we didn't have the resolve to stay the course then interest rates could soar. Businesses would go bust and families would lose their homes, destroying people's dreams and aspirations."

The business world's confidence in Osborne's management of the economy remains shaky, however, after credit rating agency Moody's downgraded the UK's triple-A credit rating last month.

Justifying its decision, the agency said the UK's "sluggish growth" now looked likely to extend well into the second half of the current decade.

"The issue is no longer whether this chancellor can admit his mistakes but whether the prime minister can now see that, with UK economic policy so badly downgraded in every sense, things have got to change," shadow chancellor Ed Balls said in response to the news.

"In the Budget the government must urgently take action to kick-start our flatlining economy and realise that we need growth to get the deficit down. If David Cameron and George Osborne fail to do so and put political pride above the national economic interest we face more long-term damage and pain for businesses and families."