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UK official to deliver another austere budget

Campaigners, wearing masks, suits and holding copies of the traditional red ministerial box to represent Britain's Chancellor of the Exchequer George Osborne on budget day, prepare to pose for the media backdropped by the Houses of Parliament as part of a campaign event in Parliament Square, London, Tuesday, March 19, 2013. The event held Tuesday was organized by the "IF" campaign to coincide with the British Finance Minister delivering his annual budget speech to parliament on Wednesday. The "IF"campaign, which is a coalition of 170 charities, want the UK and G8 governments to increase agricultural aid spending to help fight poverty and hunger in developing countries. (AP Photo/Matt Dunham)

LONDON (AP) -- Britain is on the verge of slipping back into recession, Moody's Investor Service has slashed the country's Triple A credit rating, and the opposition is baying for the government to loosen the fiscal reins.

Even so, Treasury chief George Osborne is expected to cling to his message of austerity in delivering his budget Wednesday. Prime Minister David Cameron has said that spending cuts and tax increases are the way forward. Only weeks ago, he offered a defense of the Conservative-led government's economic policies, pointing to an uptick in exports and lower unemployment.

The economy shrank by 0.3 percent in the last three months of 2012, with predictions of another contraction in the first quarter of 2013. That could lead to a recession for the third time in about four years.