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ERBIL, Iraq — Iraq's autonomous Kurdish region said Tuesday it has made more than $3.29 billion in revenues since June from direct oil export sales that the country's federal government considers illegal.

Baghdad, which announced a rise in exports on Tuesday, insists all oil sales must go through the federal government, while the three-province region argues that lacking federal funding justifies independent action.

Both sides are facing financial crises due to low oil prices and the costly war against militants, which overran large parts of Iraq in 2014.

Iraqi Kurdistan indicated in a report that it averaged $682 million per month in revenue from direct sales from June through mid-November, up from an average of $347 million it had received from Baghdad in earlier months.

The federal oil ministry meanwhile announced Tuesday that it exported an average of 3.36 million barrels per day (bpd) in November, a level "not realised for decades".

But the increase in exports appeared to be at least partially due to reserves of oil not exported in October due to bad weather at the southern port of Basra, and was also dampened by a price per barrel of $36.

Baghdad and Kurdistan reached a deal on oil exports and funds at the end of 2014, under which the region was to export 250,000bpd and another 300,000bpd from the disputed province of Kirkuk.

In exchange, the federal government would release the region's share of the national budget.

Kurdistan says its exports were initially lower than expected but later surpassed the required level, while an oil ministry official said this was not the case.

The region said it began direct export sales in June "due to shortfalls caused by the Iraqi federal government in sending less than 40 per cent of [its] budget entitlement", but the oil ministry official noted that the practice started long before that.

"Any amounts leaving Iraq without the approval of the federal government and the oil ministry is considered smuggling," the official said, restating Baghdad's long-held stance.

A swathe of northern territory claimed by both Baghdad and Kurdistan, including oil-rich Kirkuk, ties in with the dispute between the two sides over resources.

Kurdish forces gained or solidified control over many disputed areas, including large parts of Kirkuk, after federal troops fled the militants' June 2014 offensive.

Baghdad is currently ill-positioned to force either the territory or oil issues, with its troops tied down battling the militants and Kurdish forces, which have strong international backing, also playing a major role in the fight.

AMMAN — Jordan Chamber of Commerce (JCC) President Nael Kabariti on Tuesday called for enhancing the Kingdom's commercial and investment cooperation with Brazil and Georgia, and increasing relations among their private sectors' institutions.

Kabariti made these remarks at two separate meetings with Brazilian and Georgian ambassadors to the Kingdom Francisco Carlos Soares Luz and Grigori Tabatadaze respectively.

At the meeting with the Brazilian diplomat, the JCC president stressed the importance of increasing relations between both countries' private sector representatives.

He also referred to a planned visit by a Jordanian economic delegation to Brazil soon, so as to launch new scopes of commercial relations, increase the commercial exchange volume and encourage the private sector to establish joint investment projects.

Luz said the Brazilian foreign minister is currently preparing to visit the Kingdom with a high-profile delegation, stressing the significance of exchanging commercial delegations.

He also called for benefiting from entrepreneur sectors to invest in his country, and boosting cooperation in the pharmaceutical, transport and food sectors. 

At the meeting with Tabatadaze, Kabariti commended the Jordanian-Georgian ties at different sectors, describing these relations as a solid base to enhancing economic cooperation and increasing the commercial exchange.

Tabatadaze noted that the Georgian chamber of commerce and industry is willing to sign a memorandum of understanding with the JCC to develop the commercial exchange between the two countries and exchanging information on economic sectors, in addition to cooperating in technical fields to support small- and medium-sized enterprises. 

MOSCOW — Russian oil firms are drilling more, showing the world's top crude producer is ready for a longer fight for market share with the Organisation for Petroleum Exporting Countries (OPEC), as its industry can carry on even if oil prices reach $35 per barrel.

As OPEC prepares to meet on Friday in Vienna, Russia is sending a low key delegation for talks which are very unlikely to result in any output deal.

OPEC oil ministers have repeatedly  said they would only cut production in tandem with non-OPEC.

According to Eurasia Drilling Company (EDC), the largest provider of land drilling services in Russia and offshore in the Caspian Sea, Russian drilling measured in metres rose 10 per cent in the first six months of this year from a year ago, despite a decline in oil prices to less than $50 per barrel from their peaks of $115 in June 2014.

"Despite the recent fall in oil prices, Russian production, continued to accelerate, as oil producers remained profitable even in the lower oil price environment, helped by the effect of a weak ruble on costs and lower taxes, which decline in a lower oil price environment," Bank of America Merrill Lynch indicated in  recent research.

Moscow has surprised OPEC by ramping up output to new record highs this year despite low oil prices, which OPEC had hoped would depress production from higher cost producers.

Moscow responded by steeply devaluing the ruble, giving an edge to its exporters. In many OPEC Gulf producers, currencies are firmly pegged to the dollar.

According to EDC, the Russian drilling market is based on long-term contracting, which results in lower pricing and less margins volatility, as compared to other countries more subject to the spot market.

Total drilling has more than doubled over the past decade to more than 22 million metres per year.

Russian oil production, which together with sales of natural gas account for half of state budget revenues, has been steadily rising since 1998, apart from a marginal decline in 2008.

According to official data, the number of producing wells in Russia has increased in 2014 to 146,279 from 143,875 in 2013.

The number of horizontal wells, a more efficient method of extracting oil, has increased by more than six times since 2005.

The number of wells in the Middle East, including in Saudi Arabia, has also risen over the past year, according to data from OPEC, in steep contrast to fast declines in many other producing areas as a result of low oil prices.

In the United States, the number of oil rigs has fallen by 1,173 over the past year to 744 as the shale oil boom cools due to lower oil prices, according to oil services company Baker Hughes.

Merrill Lynch indicted that most Russian oil companies break even at an oil price as low as $35 per barrel comparing to $40-$50 for Latin America's producers.

Separately, OPEC is set to debate a technical increase of its production ceiling later this week to accommodate returning member Indonesia, delegates said on Monday, while hopes of a meaningful dialogue with rival non-OPEC members all but faded.

Indonesia asked OPEC this year to renew its membership, aiming to benefit from closer ties with oil producers.  Some in the group say that Indonesia can offer insights in to oil consumers' views as it is now a net oil importer.

Indonesia produces some 900,000 barrels per day (bpd) and this would need to be accommodated into OPEC's production ceiling, which has not changed from 30 million bpd over the past few years.

OPEC needs to present the issue very carefully to the markets, so it is perceived only as a technical accommodation and not as a production increase at a time oil prices are already trading far below OPEC's expectations because of a growing global oil glut.

One OPEC delegate, who asked not to be named, said raising the ceiling to 31 million bpd would be discussed at the December 4 meeting and added he saw no impact on prices because Indonesian supply would simply be taken from non-OPEC to OPEC.

"Indonesia is rejoining, so how can you leave the ceiling at 30 million barrels a day? It is sensible," a second OPEC delegate said.

A third delegate said he expected the issue to be discussed this week but he added a formal decision might be taken later. 

AMMAN — Amman Chamber of Commerce (ACC) President Issa Murad on Monday discussed with Mitja Bervar, president of the Slovenian National Council, ways to enhance economic and commercial ties between both countries.

Murad and Bervar also spoke about activating bilateral signed agreements, especially at the private sector level.

The ACC chief highlighted the possibility for Slovenia to benefit from the “excellent” geographical location of the Kingdom as a hub for exports and imports from and to Europe and other parts of the world.

He also referred to a visit by a Jordanian economic delegation to Slovenia  next January to hold talks at the private and public sectors levels to contribute to enhancing bilateral economic ties and diversifying the commercial exchange.

Bervar commended the “great position” Jordan has reached as an economic centre for the regional countries, stressing that his country is looking forward to benefiting from Jordanian capabilities in the ICT sector and exchanging technological expertise.

He indicated that Slovenian companies are currently searching for new markets, and expressed willingness to benefit from the Jordanian market and the several agreements the Kingdom has signed with many countries. 

ACC First Deputy President Ghassan Khirfan presented a briefing on the chamber’s services it presents to some 50,000 members, noting that the chamber is considered the biggest incubator and representative of the private sector in Jordan.

TEHRAN — Iran is seeking $25 billion in investments from 50 deals involving international oil and gas companies, foreign executives were told Saturday in Tehran as the government outlined new contractual terms.

Oil Minister Bijan Zanganeh opened a two-day conference in the capital attended by BP, Shell, Total of France, ENI of Italy, Repsol of Spain, OMV from Austria and other majors.

All are weighing a return if, as expected, sanctions related to Iran's nuclear programme are lifted in early 2016 in line with a July 14 deal between Tehran and six world powers led by the United States.

The new Iran Petroleum Contract (IPC) will replace "buy-back" agreements in which foreign companies were paid a set price for all oil and gas they helped Iran exploit. Iran at that point took over production.

The IPC will instead launch joint ventures for crude oil and gas production with international companies being paid a share of the total output, officials said.

The Iranian partner in a joint venture must have a majority stake of at least 51 per cent.

Zanganeh said consultations with international companies led to the new contracts, which would initially be four years in length at the exploration phase, extendible for a further two years.

Iran will have between five and seven years to pay back initial sums invested by the foreign companies once production starts but cooperation and development in commercially viable fields could go on as long as 25 years, officials indicated.

"The contract models introduced today are not perfect or ideal, but an effective and responsive model for both sides," Zanganeh said, noting that $25 billion of foreign investment would constitute "success".

US companies absent

"Like any other human creation it may need amendment and development," he added of the new contract.

Iran has the world's fourth largest oil and second-largest proven gas reserves and its energy industry has been under-developed since the Islamic revolution in 1979.

Asked why no US companies were at Saturday's event, Zanganeh said there was no bar on them considering Iran's energy market but American firms were put off because sanctions are still in place.

"The atmosphere and climate is ready for the presence of these companies in development of Iran's oil industry but they themselves have problems for being present in Iran," he added.

Iran is scheduled in February to hold a conference in London regarding investment and the new contracts which, if sanctions have by then been lifted, could attract US energy giants.

An oil embargo imposed in 2012 by the US and European Union as punishment for Iran's disputed nuclear programme, it denies ever seeking to develop a bomb, severely damaged Tehran's energy industry and sales income.

Stephane Michel, president of exploration and production for Total in the Middle East and North Africa, described the contract and project offers as an "important milestone" for Iran but said further analysis was needed before any deal.

"We need to look at what was presented to better understand how it's going to work and to make up our mind," he said. "But it's good to be able to do that now, based on facts."

"It's complex and we need to study first the length of the contracts and second who the partners would be, both in development and operations," he added. 

Iran produces about 2.8 million barrels of oil per day (bpd), compared to 4 million bpd in 2011, following US and other Western pressure on buyers to steer clear of the country.

The nuclear deal, however, has paved the way for new tie-ups and 152 international companies were at Saturday's event, organisers said, along with 183 Iranian firms.

Despite low crude prices Iran is intent on reclaiming lost market share and has pledged to increase output by 500,000bpd once sanctions are lifted, independent of guidance from the Organisation of Petroleum Exporting Countries.

Iran's regional rival Saudi Arabia has refused to cut its output despite crude prices falling massively in the past year.

MANILA — Climate disasters may double in the next two decades unless the world cuts its carbon dioxide emissions, the Asian Development Bank (ADB) said Friday, with "high risk" nations in Asia set to be hard hit. 

The report, which looked at disasters from 1970 to 2013, said if carbon dioxide concentration in the atmosphere continued to rise at an annual rate of two parts per million, the frequency of climate disasters could double in 17 years.

It said three "high risk" countries, the Philippines, Indonesia and Thailand, would be particularly affected.

Also at risk were emerging nations' economic growth rates, the bank added, stressing that tackling climate change would boost prosperity levels.

The ADB, a Japan-led institution modelled on the World Bank, said the global damage bill from natural disasters was steadily rising, with the most recent decade, 2005-2014, costing some $142 billion, up from $36 billion during 1985-1994.

It added that climate-related disasters had cut into the growth rates of Australia, China, Indonesia, Thailand and Vietnam and the trend was "set to worsen". Countries should invest in a shift from fossil fuels to renewable energy to reverse this, it stressed.

"Policy makers and economic advisors have long held the view that climate action is a drain on economic growth," said the ADB's Vinod Thomas, a co-author of the study.

"But the reality is the opposite: the vast damage from climate-related disasters is an increasing obstacle to economic growth and well-being," he added.

ISTANBUL — As a onetime Wall Street banker and former finance minister, Turkey's new economy tsar Mehmet Simsek is widely seen as a proponent of sound economics and fiscal discipline.

But the real test of his credibility is yet to come, as investors wait to see whether he will be able to drive through tough structural reforms and appoint an independent central bank chief come April.

Prime Minister Ahmet Davutoglu on Tuesday named Simsek to his new Cabinet as deputy prime minister in charge of the economy, a position previously held by Ali Babacan, who was left out of the new government.

The inclusion of Simsek, who previously worked at UBS on Wall Street and Merrill Lynch in London, offers some reassurance to investors concerned the Cabinet is stacked with allies of President Recep Tayyip Erdogan, including his own son-in-law.

"In Babacan's absence, the government will need to work harder to build credibility. The new government programme and the structural reform programme should be the first tests for the new Cabinet," said Yarkin Cebeci, an economist at JPMorgan in Istanbul.

Simsek takes over the job at a time when economic and monetary policy appear to bend more and more to Erdogan's will. The founder of the ruling AK Party, Erdogan has railed against high interest rates, raising concern among foreign investors the central bank has lost independence.

Investors see the AKP's return to single-party rule after its sweeping November 1 election victory as offering an opportunity to follow through with long-neglected economic reforms. But success will largely depend on whether Simsek and others will be able to resist Erdogan's push for populist policies.

"Simsek is the key anchorman now for economic reforms — let's see if he has the political capital to drive these forward," said Timothy Ash, a strategist at investment bank Nomura.

Key reforms should include labour reform to increase labour productivity and support industries that will help produce more value added export goods.

Simsek will oversee the Treasury, the central bank and coordination between economy related institutions.

Pressing problems

Analysts say the most pressing problems include the need to slow a rapid increase in labour costs and scale back private sector debt. Both have hampered growth and made Turkey's balance sheet one of the most fragile in emerging markets.

"Arguably the most rapid progress on this front can come from a tighter central bank framework, and hence the choice of central bank governor in April will be watched keenly by the markets," UBS Strategist Manik Narain told Reuters.

Central bank governor, Erdem Basci, ends his five-year term in April. Although he could be reappointed, Basci was a school friend of Babacan and their fates are seen as closely linked.

Babacan both proposed Basci as central bank governor and was seen as his main defender in the Cabinet when Erdogan and ministers criticised monetary policy.

"I also wonder if Babacan's exclusion also means the end for his close ally, Basci," Nomura's Ash said, adding that Basci appeared unlikely to be given another term.

In addition to Basci, three deputy central bank governors will see their terms end by June. Simsek will also need to appoint a new Treasury undersecretary. The top job at the Treasury has remained open for 15 months, since the former undersecretary went to the International Monetary Fund (IMF).

"This is a clearly an Erdogan-made cabinet, and I see Simsek's appointment as part of calming the markets," said Ugur Gurses, a former central banker and a columnist at Hurriyet newspaper.

"His influence on outlining a detailed and do-able reform plan and appointments of the new Treasury undersecretary and the central bank governor will be the major challenges he will face," he added.

Separately, Davutoglu said on Wednesday that Turkey's new government will aim to bring inflation down to single digits and maintain central bank independence, laying out a market friendly programme designed to woo back investors.

Monetary policy will emphasise financial and price stability, while supporting growth and employment at the same time, Davutoglu said in his speech to parliament.

"We believe that it will be crucial for the government to press ahead with a coherent and well-prioritised reform package," Citigroup analysts said in a note to clients last week, before Davutoglu announced his programme.

Industrial policy

The government will focus on macroeconomic stability, and microeconomic and sectoral reforms, he said. It will try to accelerate industrialisation and bolster manufacturing output.

He also pledged to address Turkey's yawning current account deficit, a constant source of concern for investors.

AMMAN — The Amman Chamber of Commerce (ACC) on Saturday deplored increasing the rates of container shipping by some shipping agencies, saying the move would negatively affect the private sector and different commercial activities.

ACC expressed its regret for this “unjustified” raise without the shipping companies taking into consideration the minimum level of coordination and consultation with the private sector and relevant merchants and importers, according to a chamber statement.

The ACC had received complaints from merchants and importers that some shipping companies will increase the prices of dry containers imported from the Far East to the Red Sea by $150 for 20-foot containers and by $300 for 40-foot containers as of the beginning of December.

The companies will also apply another increase of the same rate as of the middle of December.

ACC described the step as “completely unjustified”, especially when the national economy is going through a difficult phase, and due to the surrounding circumstances and the “remarkable decline” in oil prices.

The chamber also called on the ministries of industry, commerce and supply and the transport to intervene and deter these companies from taking such a decision, and finding a way of cooperation among all stakeholders to stimulate the economic movement instead of deteriorating it.

LONDON/DUBAI — The Organisation of Petroleum Exporting Countries (OPEC) is determined to keep pumping oil vigorously despite the resulting financial strain even on the policy's chief architect, Saudi Arabia, alarming weaker members who fear prices may slump further towards $20.

Any policy U-turn would be possible only if large producers outside the exporters' group, notably Russia, were to join coordinated output cuts. 

While Moscow may consult OPEC oil ministers before their six-monthly meeting next week, the chances of it helping to halt the price slide remain slim.

"Unless non-OPEC say they are willing to help, I think there will be no change," said a delegate from a major OPEC producer. "OPEC will not cut alone."

When the exporters' group last met in Vienna in June, Saudi Oil Minister Ali Al Naimi and those from other wealthy Gulf states could barely hide their jubilation.

OPEC's historic decision in November 2014, to pump more oil and defend its market share against surging rival suppliers, was working, they proclaimed as crude traded near $65 per barrel. Six months later, it has hit $45, down from as much as $115 in the middle of last year.

Now some member states are talking about a return to $20 oil, last seen at the turn of the millennium. They point to Iranian confidence that international sanctions on its economy will be lifted by the end of the year.

"Iran is announcing its production is going to increase as soon as they lift the sanctions and we need to do something. We (OPEC) cannot allow going into a war of prices. We need to stabilise the market," Venezuelan Oil Minister Eulogio del Pino said on Sunday.

Asked how low prices could go next year if OPEC failed to change course, he said: "Mid-20s."

Goldman Sachs said this year it saw a possibility of crude going even below $20 because of the huge global oversupply, a strong dollar and a slowing Chinese economy.

Most analysts doubt the Iranian sanctions will be lifted before next spring under its nuclear deal with world powers, but sooner or later its output will rise.

Saudi Arabia under strain

Already the collapse in prices has partly achieved OPEC's goals. It has boosted global demand and curbed growth in supplies of US shale oil, which is relatively expensive to produce. 

Non-OPEC supply is also expected to fall for the first time in almost a decade next year as struggling producers cut back on capital spending.

But the world is still producing much more oil than it needs. Russian output has unexpectedly set new records and global stocks are ballooning.

Even the finances of Saudi Arabia, which led OPEC's policy shift, are under more strain. Standard & Poor's rating agency forecasts its budget deficit will rocket to 16 per cent of the gross domestic product (GDP) in 2015 from 1.5 per cent in 2014.

Riyadh describes this year's deficit as manageable. 

However, Bank of America Merrill Lynch said on Monday it believed the pressure was so high that the Saudi government would be forced  either to devalue its dollar-pegged currency or cut oil output.

Such a cut would mean executing an about-face that many rivals would interpret as a strategy failure. 

Keeping the taps open while hoping for a longer-term payoff still appears to be the choice of Riyadh and its wealthy Gulf allies — Qatar, the United Arab Emirates and Kuwait.

Growing criticism

Russia may attend informal consultations with OPEC before the Vienna meeting on December 4 but there is little likelihood Moscow will change its stance and work with OPEC on cutting output, sources said.

OPEC kept policy unchanged at the June meeting apparently  with no major dissent. But this time, the opposition from OPEC hawks and poorer members, such as Venezuela, is more visible and the criticism is getting stronger.

"I don't think anything will happen because the Saudis do not want to reduce production. They are shooting themselves in the foot. And they are shooting everyone else," said a second OPEC delegate, who asked not to be named.

Illustrating the growing divisions, OPEC was unable to agree in November on an update of its long-term strategy. Iran and Algeria, in comments on a draft OPEC document seen by Reuters, suggested the group should resume defending prices and controlling supply through quotas for member states.

But even some of those in OPEC who support such steps see little chance of their being agreed. 

"I believe that OPEC will not reach an agreement to control production rates and the Saudis will stand by their strategy," said a third OPEC delegate. "No quotas will reached."

OPEC ditched quotas when it set its overall output target at 30 million barrels per day (bpd) for 2012. This has been exceeded all this year, driven by record Saudi and Iraqi output. According to OPEC figures, production was 31.38 million bpd last month.

Ministers might consider raising the ceiling to 31 million bpd to accommodate Indonesia, which pumps about 900,000 bpd and is rejoining OPEC after a seven-year break, delegates say.

A big unknown for 2016 is how much extra oil Iran can produce quickly. Gulf OPEC delegates predict a modest 100,000-200,000 bpd, while Tehran says it could pump another 500,000 bpd within a few months of the lifting of sanctions.

"At present, I can't see any indication that Saudi Arabia will seek to alter its market-share oriented strategy," said David Fyfe, head of research at trading firm Gunvor.

"The resilience of the strategy will be tested over the next 12-18 months by any production increases that emerge from Iran, Iraq and Libya," he added.

LONDON — British Finance Minister George Osborne's latest spending plans have a roughly 50 per cent chance of success, the head of the country's non-partisan Institute for Fiscal Studies (IFS) think tank said on Thursday.

Osborne stuck to his commitment of turning a budget deficit into a surplus by 2020 in a mid-year budget update on Wednesday, confounding predictions that he might have to rein in his ambitions for putting public finances in the black.

But the IFS, which releases a closely watched analysis after each British budget statement, said Osborne had little room for manoeuvre if growth was weaker than expected, tax revenues fell short or spending proved intractable.

"He's going to need his luck to hold out. He has set himself a completely inflexible fiscal target — to have a surplus in 2019/20. This is not like the friendly, flexible fiscal target of the last parliament," IFS Director Paul Johnson said.

"If he is unlucky, and that's pretty much a 50/50 shot, he will either have to revisit the spending decisions, raise taxes, or abandon the target," he added.

Osborne has made a balanced budget the centrepiece of his time in office since 2010. But he is only half way through an austerity push he once planned to have completed by now.

"This is not the end of 'austerity'. This spending review is still one of the tightest in post-war history," Johnson elaborated.

The big feature of Osborne's budget update was abandoning plans to scrap tax credit payments to low earners before they are replaced by a new benefit, universal credit.

But the IFS said this would offer only temporary relief to Britain's poorest. Under the new benefit, spending on welfare for working-age Britons would fall to a 30-year low as a share of national income.

"The chancellor hasn't gone soft," IFS researcher Andrew Hood said. "In the long run, the system will be significantly less generous to low-income families, both in and out of work. That is the big headline, not the U-turn."

IFS figures showed that by 2020, 2.6 million working families would lose on average £1,600 ($2,420) in benefits a year and 1.2 million non-working households would lose 2,500 pounds. Several million other families would gain, but by less.

Labour Party finance spokesman, John McDonnell, said the IFS figures showed that Osborne's plans were unravelling.

"We said this was a smoke-and-mirror spending review and we were right," he told reporters.

A finance ministry spokesman said it was inappropriate to compare the benefits individuals received now with the universal credit, and that existing claimants could freeze their current cash entitlement rather than switch to universal credit.

Osborne said the government, which is borrowing £73.5 billion (105 billion euros, $110 billion) this year, is on track to balance its books by 2019-20.

This will be achieved through the most significant belt-tightening in a generation which includes reducing welfare by £12 billion and the budgets of some government departments by up to 37 per cent.

He dropped a plan to cut tax credits, a benefit payment for low-income working families, after the House of Lords voted last month against the move in a humiliating defeat for the government.

Opponents of the move, including many within his own centre-right Conservative Party as well as the main opposition Labour Party under Jeremy Corbyn, said it would have left over 3 million families worse off.

"I've listened to the concerns. I hear and understand them," Osborne told lawmakers. "Because I've been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether."

Osborne, finance minister since Cameron took office in 2010, said that the decision was affordable because of projections that tax revenues were set to increase.

Treasury sources indicated that the full £12 billion of planned welfare savings would still be carried out through reductions to other types of state benefits.

The 44-year-old, effectively Cameron's number two, also sprung a surprise by announcing that police funding would not be cut, defying a widespread expectation among senior officers and commentators.

"Now is not the time for further police cuts," Osborne told the Commons. "The police protect us and we're going to protect the police."

In England and Wales, the number of police has fallen nearly 12 per cent since 2010 and senior police figures had warned that a further reduction could hit their ability to prevent a major Paris-style attack in Britain.

Making the sums add up

Britain's official economic growth forecast was held at 2.4 per cent for 2015 but revised up to 2.4 per cent for 2016 from 2.3 per cent.

Debt was predicted to be 82.5 per cent of national income this year, down from 83.6 per cent at the time of Osborne's annual budget in July.

The finance minister also lowered his borrowing forecasts to £73.5 billion this year and to £49.9 billion next.

But some analysts questioned how Osborne's figures added up.

"In an upbeat statement to parliament, the UK's Chancellor of the Exchequer, George Osborne, suggests that UK growth will be stronger than previously thought, government borrowing will be lower and austerity will be relaxed," ING economist James Knightley said.

"Many will question how a £27 billion improvement in the government's fiscal position has been generated from such a marginal increase in the growth forecast, modest changes to the interest rate outlook and the introduction of higher stamp duty on second homes," he added.

McDonnell, a key ally of left-winger Corbyn, accused Osborne of taking too long to eliminate the deficit.

"The reality is this: after five years, the deficit has not been eliminated and this year it is expected to be over £70 billion," he said.

Osborne sweetened the cuts by announcing an affordable house building programme amid complaints that demand has priced many properties out the reach of all but the wealthiest, particularly in southeast England.

The government will build 400,000 affordable homes in the "biggest house building by any government since 1970s", with extra support for London, Osborne added.

He also announced a higher rate of tax on people buying second homes and buy-to-let properties.