Following the downbeat news released last week and yesterday showing that the British economy contracted 0.5% in the fourth quarter of 2010 and inflation spiked to 3.7% in December, Prime Minister David Cameron pledged to cut budget deficit.

The coalition government is looking forward to slashing deficit to 10% of GDP in the fiscal year ending March and to 1.9% by the year 2015 as Cameron revealed that cutting budget deficit is necessary and is not elective to revive growth.