Britain remains under monitoring by the EU for having failed to take sufficient “effective action” to reduce its deficit.
Britain was cautioned and will stay under scrutiny from Brussels for the coming two years during which time it is expected to get its fiscal targets on track.
The agreed EU limit for deficits is 3%. Britain’s was running at 5.2% in 2014.
The UK is among 11 countries, including Portugal, Greece, and Spain, under the “corrective” arm of the EU’s Excessive Deficit Procedure.
The problem first arose in 2008 but the UK was given a reprieve due to the global financial crisis which was just becoming manifest.
The UK budget shortfall has been cut from 10.9% in the wake of the financial crisis to 5.2%, but it remains higher than 3% due to the bailouts made to a number of British banks.
The UK's deadline to reduce its financial shortfall was extended to 2014, but now the Government has been told it had still “not taken effective action to correct the excessive deficit”.
Britain now has until 2016-17 to reach the 3% goal.
Chancellor Osborne has promised to eliminate the deficit by 2018-19.
Britain will escape a fine for its failure as the EU is able to impose fines or sanctions against eurozone members.
