UPDATE 1-UK not borrowing more money in March budget-Osborne

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LONDON, Feb 26 (Reuters) - British finance minister George Osborne, under pressure to find ways to boost a stagnant economy, said on Sunday borrowing more money to lift spending or cut taxes was off the agenda for the budget statement he will deliver in March.

"Any tax cut would have to be paid for...there would have to be a tax rise somewhere else or a spending reduction... What we are not going to do in this budget is borrow more money to either increase spending or cut taxes," Osborne told Sky News television.

"We can't have any deficit-financed measures in that sense because getting the budget deficit down, which is now happening, is an incredibly important part of keeping interest rates low in Britain, keeping confidence in the British economy, keeping economic stability in Britain," he said in an interview from Mexico City where he is taking part in a meeting of the Group of 20 countries.

Britain's Conservative and Liberal Democrat coalition has made erasing the country's budget deficit - which was at a peak of 11 percent when they came to power in 2010 - a cornerstone of their economic policy.

But Osborne has been facing calls from business and across the political spectrum for tax cuts to stimulate growth after Britain's sluggish recovery from a 2008-2009 economic slump.

The Liberal Democrats want him to raise the threshold at which people start paying taxes, while there are demands from within his own Conservative party to cut business taxes.

The opposition Labour party has urged him to make a temporary cut in value-added tax, a levy on purchases.

And Britain's biggest business lobby group CBI has called on the government to consider changes to the tax system to encourage investment in infrastructure.

Data last week showed that the government was ahead of schedule in its programme to cut borrowing.

But a choppy growth outlook for the rest of this year is likely to make it harder for Osborne to reduce borrowing further out, leaving little leeway for giveaways in the March 21 budget. ($1 = 0.6306 British pounds) (Reporting by Olesya Dmitracova and Tim Castle; Editing by Elaine Hardcastle)