Moody's doubts government's ability to meet its deficit targets

Jessica Morris
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The Conservatives want to reduce welfare spending by £12bn by 2017-18 (Source: Getty)

Credit ratings agency Moody's has questioned the speed by which the new government will be able to shrink its gnawing budget deficit.

"We expect the budget deficit to decline continuously over the coming years, a credit positive," Moody's said.

"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."

Chancellor George Osborne has said he'll deliver a new budget on the 8 July which will be geared towards "working people".

The Conservatives previously pledged to reduce welfare spending by £12bn by 2017-18 - but so far only £1.5bn have been announced according to the IFS.

It's also promised to shrink borrowing by 5.2 per cent over the next parliament.

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