Chancellor Alistair Darling's next week pre-Budget report is expected to raise taxes and cut spending in order to slash UK's £175 billion deficit.
As per some sources, Mr. Darling believes that it is too early to introduce a substantial fiscal tightening as it could hinder economic recovery.
A person familiar with the planning of next week's pre-Budget report said, "We don't anticipate any dramatic fiscal tightening."
The statement may also state how funds from increased taxes will be used into development programmes such as 'green' technology and 'jobs guarantee' for the young people.
In the report, Mr. Darling may also announce less spending on hospitals and schools in order to hack spending.
A fiscal responsibility bill is also expected to state detailed provisions to hack the deficit to 5.5 per cent by 2014.
It may be noted here that the UK is the only industrialized country that is still struggling to emerge from recession.