The Chancellor of the Exchequer has told the Today programme that the key question to be faced at the forthcoming budget is "can Britain live within its means?"

And Mr Osborne told Today presenter James Naughtie that "the culture has to change in our financial services. I think the levels of pay are excessive and totally out of kilter with pay in other sectors of our economy.

"I don't think there is a silver bullet to the question of pay and bonuses or else it would have been fired in the past couple of years.

He called upon "to be much tougher in saying 'is this a fair way to spend the company's profits?'"

And Mr Osborne backed the expansion of the Bank of England's role as a financial regulator, saying: "No-one was making the big judgement calls" when the Royal Bank of Scotland merged with ABN-Amro and contributing the breakdown of the banking system.

"A central bank has the capacity to do that, the authority to do that", he added.

Get in touch with Today via email , Twitter or Facebook or text us on 84844.