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Moody's says UK may not cut public spending as fast as planned

[LONDON] Britain's government may struggle to cut public spending as fast as it plans, due to the large reductions required and the likelihood that the easiest cuts were made in earlier years, ratings agency Moody's said on Tuesday.

Moody's did not change Britain's Aa1 sovereign rating with a stable outlook in an update of its research after Prime Minister David Cameron's Conservatives' unexpected outright majority in this month's election. "We expect the budget deficit to decline continuously over the coming years, a credit positive," Moody's economists wrote in a note to clients. "However, we also believe that the pace of adjustment might be somewhat slower than the government targets, as the planned spending cuts are very substantial," they added.

Finance minister George Osborne will publish a new budget on July 8.