Osborne: Further spending cuts may be needed to weather 'storm clouds' in world economy

The Chancellor may further reduce public spending in next month's Budget to help tackle the "storm clouds gathering in the world economy".

George Osborne said he would have to look again at public spending because the British economy "is smaller than we thought" and "the global risks are growing".

In an interview with the BBC while attending a meeting of G20 finance ministers in Shanghai, China, Mr Osborne said he would "do what is required to keep our country safe and secure".

Figures released on Thursday showed gross domestic product rose by 0.5% in the fourth quarter, while Britain's economy grew by 2.2% for 2015 as a whole.

The Office for National Statistics data also showed household spending growth slowed slightly to 0.7% in the fourth quarter, its slowest increase of 2015, but in annual terms was still up 3.1% - matching the third quarter's eight-year high.

Mr Osborne said the Government would make sure Britain "only spends what it can afford".

Labour's shadow chancellor John McDonnell said the comments represented a "total humiliation" for Mr Osborne.

He has sneaked off to China to admit what Labour have been saying for months, that his recovery is built on sand. Far from paying our way, Osborne's short-term economics means Britain is deeper and deeper in hock to the rest of the world.

"If the Bankers' Chancellor had been doing his job properly he would be collecting taxes from Google and other tax-dodgers. Instead he is threatening the British people with paying an even higher price for his own failures," he added.