Britain reveals austerity budget after market chaos

UK Finance Minister Jeremy Hunt.

Britain on Thursday unveiled an austerity budget based on tax increases and spending cuts of 55 billion pounds ($65 billion), while confirming that its economy had entered a recession.

And British Finance Minister Jeremy Hunt stressed during his presentation of the budget to Parliament that the difficult measures are necessary in order to achieve financial stability after the recent turmoil, stressing that they will reduce the severity of the slowdown in the country.

Hunt ushered in a new era of austerity after former Prime Minister Liz Terrace's disastrous short term in power, a day after official data showed UK inflation had risen to a 41-year high of over 11 percent.

The finance minister told parliament on Thursday that the Office for Budget Responsibility considered "that the UK, like other countries, is now in a recession".

Despite the economic slowdown, Hunt and Prime Minister Rishi Sunak stress the need for tough action after the former prime minister launched a series of tax cuts that sent panic into financial markets.

The pound sterling fell by 1 percent against the dollar after the disclosure of the austerity budget in the United Kingdom.

It hit a record low against the dollar in late September, after Les Traces failed to disclose the impact of tax cuts on growth and inflation.

This comes as the Minister of Finance pointed out that the British gross domestic product will decline by an additional 1.4 percent in 2023.

Despite the bleak outlook, Hunt announced Thursday tax hikes for workers as well as spending cuts.

However, he pledged to increase spending on the National Health Service amid severe delays in operating on patients.

The Minister of Finance added that benefits for the unemployed and retirees will rise to a level close to the inflation rate, while the minimum wage will rise.

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