UK finance minister Jeremy Hunt says public spending will grow slower than the economy

British finance minister Jeremy Hunt said, on Thursday, public spending would grow more slowly than the economy, but overall spending in public services would rise in real terms over the next five years.

Hunt said just over half of the needed 55 billion pound ($65.21 billion) fiscal consolidation would come from cuts in spending.

"We are going to grow public spending - but we’re going to grow it slower than the economy," Hunt said in a speech to parliament.

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Hunt said for the remaining two years of the government's Spending Review, it would protect the increases in departmental budgets it had already set out in cash terms.

"And we will then grow resource spending at 1 per cent a year in real terms, in the three years that follow," Hunt said.

Hunt said it would not be possible to restore the aid budget to 0.7 per cent of gross national income from its current level of 0.5 per cent because of the "significant shock to public finances".

He delayed a decision on increasing defence spending, saying a new integrated review on security policy was needed and he would update again in the next budget.

But he announced 3.3 billion pound increase in the National Health Service's budget this year and next, and a rise in spending for social care and schools over the next two years.

($1 = 0.8434 pounds)