The UK’s Labour government, led by Prime Minister Keir Starmer, has announced £14 billion in spending cuts to address the country’s economic challenges. The decision, announced by Finance Minister Rachel Reeves on Wednesday, follows disappointing economic growth forecasts and rising borrowing costs.
Reeves cited increased global uncertainty as a key factor affecting the country’s finances and economy. The Office for Budget Responsibility (OBR) downgraded the UK’s 2025 growth forecast from 2% to 1%, warning that the government has little financial room left.
The cuts will impact social benefits, public sector costs, and tax fraud recovery efforts. Approximately £5 billion will be cut from disability and illness benefits annually, while planned increases in public spending will be reduced by £6.1 billion. Additionally, government administrative costs will be slashed by 15%, resulting in the loss of 10,000 public sector jobs.
Despite criticism from Conservative MPs, Reeves defended the measures, arguing that they will improve the UK’s long-term GDP. The OBR projects improved growth of 1.9% in 2026 and beyond.
The cuts have sparked backlash from Labour MPs and the public. Around 200 protesters gathered outside Downing Street, chanting slogans such as “Fund social care, not war” and “Tax the rich, don’t cut benefits.”
Mel Stride, the Conservative Party’s finance spokesperson, called the cuts a “public humiliation” for Reeves, coming just six months after her previous budget introduced higher business taxes and increased borrowing to stimulate growth.
To counter the criticism, the government announced increased funding for the NHS and affordable housing. Defence spending will also rise by £2.2 billion annually.
In a rare positive sign, UK inflation fell to 2.8% in February, down from previous months, thanks to lower clothing prices. However, it remains above the Bank of England’s 2% target.
Reeves faces growing pressure to deliver better economic results before the next budget in the autumn. Kathleen Brooks, an analyst at XTB, said Reeves “still needs an economic miracle” to turn the situation around.
This article is originally published on portail.free.fr
