World financial news

U.K. Chancellor of the Exchequer Alistair Darling said governments must ensure they can afford measures to support their economies and show investors that borrowing can be repaid.

“Yes, you need to support your economy, but you have got to pay for this,” Darling told BBC Radio 4 today. “You have got to live within your means.”

Darling wants finance officials from the Group of 20 nations meeting near Horsham in southern England to commit to tax cuts or greater public spending to shore up global growth. He also wants commitments to rescue banks and more money for the International Monetary Fund to allow it to bail out troubled countries.

Britain’s budget deficit is ballooning as welfare payments climb and tax revenues fall because of the recession, likely to be the worst since World War II. Darling in November pledged the biggest round of tax cuts and spending increases in two decades, a 25 low fee payday loans.6 billion-pound ($38.8 billion) package aimed at helping voters weather the downturn.

The Treasury last year forecast its deficit to top 118 billion pounds in the year through April 2010. That compares with 36.6 billion pounds in fiscal 2008. Darling is due to update his deficit forecasts in his annual budget statement on April 22.

“Whatever you do, you do it in your national interest,” Darling said today. “At the moment we are borrowing very substantial amounts. In normal times no one would be doing anything like this.”

He told reporters in Horsham yesterday that the U.K.’s efforts to support the economy rank among the highest in the world. He also urged fellow finance ministers to tighten financial regulations.

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