Britain will face “savage and ­swingeing” public spending cuts and a loss of economic sovereignty unless a start to reducing the record £178bn fiscal deficit is made this year, George Osborne warned.

In an intensification of Tory warnings of the need for spending cuts – in the face of Labour claims that the party is diluting its plans – the shadow chancellor warned that financial markets will panic unless a “credible” plan to reduce the deficit is introduced this year.

Osborne pledged to make what the Tories are calling “in-year” public spending cuts by the summer if the party wins the election, in contrast to Labour, which plans to maintain real-term rises until 2011.

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“We will not hesitate to take the difficult decisions to get Britain working,” the shadow chancellor said. Nicholas Watt, The Guardian.

Working for whom exactly? Not the majority of the electorate at best we’ll face swinging wage cuts and at worst we’ll lose our jobs – the only people smiling at this will be the very people that got us into the mess – bankers.

Osborne is fixated on the country maintaining its AAA credit rating – one I don’t understand why – these agencies hardly covered themselves in glory over the banking crisis they gave AAA ratings to debts that where anything but. Then you have to ask why pay the price of maintaining an AAA rating? The worst that will happen is interest rates will be slightly higher.

Right now the option of accepting a lower credit rating is treated as equivalent to suggesting we leave the UN Security Council and abandon the nuclear deterrent.

But when people understand the scale of the spending cuts that an incoming government will have to make to maintain AAA, it may not be so unthinkable after all. Paul Mason, BBC.

Not unthinkable at all!