Retail data and borrowing figures pile pressure on George Osborne

But chancellor tells Davos he will stick to 'plan A' as March budget looms

George Osborne's hopes of riding out the global downturn suffered a twin blow after retail sales tumbled last month and his plan to slash government borrowing appeared to be off track, despite higher tax receipts in December.

Speaking in Davos on Friday, the chancellor said he would stick to 'plan A' despite facing calls to relax his austerity measures and fund investment to boost growth. He said he would ignore clamours to loosen the government's purse strings and pledged to maintain the path of deficit reduction set out in his autumn statement.