Its finance minister BritainRachel Reeves, announced today (26.03.2025) cuts expenditure Valued £ 4.8 billion, as it is trying to fill the fiscal gap, amid stagnation of growth and higher borrowing costs from the first budget report published last fall.
“The responsible option is to reduce our debt and lending levels in the coming years so that we can spend more on employee priorities,” Reeves said, informing the MPs to the British Parliament of the plan of mass spending cuts, at the same time that it announced a simultaneous announcement to increase defense spending to 2.5% of GDP.
In essence, Britain is also the first country to link the increase in defense spending with broader cuts in its economy, while remaining as a question whether other countries (including the EU) will be forced to proceed with social spending spending in order to finance the costs of the rally, rapid increase in safety costs.
Reeves said the welfare cuts have already been decided by last week and is estimated to save £ 4.8 billion in the budget of social welfare and would strengthen the measures to return citizens to work. He also tabled measures to combat tax evasion that will increase the Ministry of Finance’s revenue.
Warning that ‘we live in an uncertain world’, Reeves said defensive costs would rise to 2.5% of GDP, While reductions in overseas aid will help fund the aid.
The finance minister has promised to comply with the “budgetary rules” he had set in the “Autumn Budget” last October: to ensure that daily costs are covered by tax revenue and that public debt will be reduced by 20 pm.
The spring statement by the United Kingdom Minister of Finance was given in parallel with the latest financial forecasts of the country’s budget office (OBR), the independent supervisory body for public finances.
The OBR, Reeves said, downgraded forecasts for the UK development for 2025 and reduced half its previous estimation by 2%.
“I’m not satisfied with these numbers. That is why we on this side of the body are serious about taking the measures needed to develop our economy, “he said, responding to the deterioration of the growth of the OBR.
‘A world that is changing’
Since its initial budget last October, Ribs has received increasing pressure to cut public spending, further taxes or fiscal rules bending in the midst of increasing the cost of borrowing the United Kingdom, which, according to analysts, has had an analyst.
The United Kingdom also faces the spectrum of a temporary increase in inflation rate, according to the Bank of England, along with continued economic sluggishness in recent months.
Reeves is widely expected to refer to the change of financial scene from her latest budget statement, with the uncertainty of US President Donald Trump’s commercial duties, which are considered inflationary, are also a counterweight to the economy.
The Treasury had already issued a press release on Tuesday, stating that Ribs would commit to bringing “security and national renewal” to its spring statement, which, he said, would be designed “to give economic growth, to protect our workers and maintain our country”.