David Cameron 'on same page' as Barack Obama over cuts

Prime Minister David Cameron discussed the decision to announce a tough austerity Budget with Barack Obama ahead of this weekend's G20 summit.

Sources say the two leaders are "on the same page" over fiscal policy, despite the US President having written to world leaders expressing his fears last week that cutting too quickly could damage global growth.

In a telephone call yesterday they agreed on the need for consensus at the summit in Canada to underpin economic growth in the future.

Cameron briefed the President on the Budget and the two men agreed that the G20 gathering represented "a vital opportunity to cement the global economic recovery through a balance of fiscal consolidation and new strategies for growth".

Downing Street said there was "a coming together" between the leaders over economic strategy.

"On the global economy, the leaders agreed that the G20 summit this weekend would be a vital opportunity to cement the global economic recovery through a balance of fiscal consolidation and new strategies for growth."

George Osborne has insisted his Budget package of accelerated spending cuts and tax rises is in line with G20 thinking, although finance ministers from the group of nations have dropped the idea of a common banks levy after Canadian and Japanese resistance.

Cameron will hold talks with Obama on Saturday for the first time since he became Prime Minister. As well as global recovery plans, BP's response to the Gulf of Mexico oil spill is also likely to be on the agenda.