By Jonathan Davies

Ratings agency Moody's does not believe the government will achieve a budget surplus by the end of this Parliament.

The Chancellor George Osborne said in his Budget statement that the government will be running a small surplus, of around £7 million or so, by 2018/19. However, Moody's expects a budget deficit of around 1% of GDP by 2020.

In its annual credit report on the UK, Moody's said: "Spending cuts targeted by the government might be difficult for Britain to achieve in full."

But despite doubting the government's ability to run a surplus by 2019, Moody's is confident in the government's ability to grow the economy. It has forecast economic growth of 2.7% and 2.4% in 2015 and 2016 respectively.

Moody's also warned that leaving the European Union would hurt economic growth for the UK, and risk its credit rating being downgraded.