Britain braces itself for further £2.5 billion cuts in Budget

Chancellor George Osborne has slashed departmental budgets by a further £2.5 billion to help fund his Budget plans to raise the personal tax threshold and pour money into infrastructure and housing.

According to the Financial Times, the additional cuts of 1% over the next two years will hit most departments, barring health and education with the chancellor arguing that several  ministers did not spend their entire allocation last year.

The report suggests Osborne will look to support the housing market, broadening the right to buy scheme for council tenants as well as the building of new housing stock across the country.

The raising of the personal tax allowance to £10,000 next year would cost the government £1 billion while an expected freeze in fuel duties will also squeeze revenues.

The chancellor is set to face fresh criticism from Labour over ability to reduce the budget deficit and stimulate growth with the little to cheer expected in his speech at lunchtime.