U.K. Boosts Military Spending and Cuts Welfare in ‘Uncertain World’

On Wednesday, the British government established plans for a higher military spending and cuts to social benefits, since it tried to maintain the finances of the nation on the good road in what called a “more uncertain world”.

Rachel Reeves, the gate of the chessboard, said that there would be 2.2 billion more pounds ($ 2.8 billion) for the defense in the fiscal year that will begin next month. And recently reiterated announcement Reductions in the system of benefits It was expected to save about 5 billion pounds by 2030.

The changes come when the economic policies of President Trump interrupted the global economy, putting more requests to the already elongated budget of the British government. Like many other European countries, Great Britain has committed to spending more in defense to support Ukraine against Russia. At the same time, the threat of a global commercial war is lurking and interest rates have increased, increasing the government’s loan costs.

“Our task is to protect the future of Great Britain in a world that is changing before our eyes,” said Reeves in Parliament on Wednesday.

“The work of a responsible government is not simply to look at this change,” he added. “This moment requires an active government.”

Adding to the obstacles, the British economy slowed down in the second half of last yearAnd the office for the liability of the budget, an independent guard dog, halved the forecasts for growth this year at 1 % from 2 %.

Less than five months ago, shortly after the Labor Party, Mrs. Reeves presented His first budgetBy announcing a substantial increase in short -term public spending, a commitment to increase investments and a strong increase in taxes, in particular for employers. Mrs. Reeves said she wanted to reduce the number of large ads on taxes and shopping, preferably until only one year, to provide greater stability to families and businesses.

But since the budget was released in October, there has been a wave of economic uncertainty, largely derived from large and unpredictable political changes in the United States From the election of Mr. Trump. This was updated on Wednesday’s budget, known as the Spring Declaration, more consequential because it was the first great opportunity for Mrs. Reeves to respond to the economic upheaval.

He resisted the pressure to substantially change the route. Mrs. Reeves did not announce any significant modification to taxes, but the measures were instead focused on the spending plans. This included a slight reduction in public spending starting from 2026.

The pressure on the budget is not unique for Great Britain. In response to the American commitment for Ukraine, Most European countries are planning to spend more in defenseBut they are already facing high levels of debt and prospects for unrelated economic growth. However, these commitments are intended to have large -scale tax consequences while Europe is preparing to borrow much more.

Last month, the British Prime Minister, Keir Starmer, Said military expenditure would rise to 2.5 percent of the gross domestic product by 2027an extra £ 6.4 billion. Aid abroad would be cut to pay it.

Next week, the Trump administration is destined to impose what is calling mutual rates on many countries. Great Britain hopes to avoid the weight of these rates and is in negotiations with the United States. The uncertainty of commercial policy has hindered commercial investments all over the world and has caused volatility in financial markets.

Mrs. Reeves had little space to maneuver thanks, in part, to the increase in payments of interest rates and weak economic growth. The performance on 10 -year -old government bonds is about 0.3 percentage points more than in October. The payments of debt interest were £ 105 billion for the tax year that ends this month, more than spent by the Department of Defense, the Ministry of Justice and the Ministry of Combined Interior, said Reeves.

And the Bank of England cut the rates slowly Due to persistent risks for inflation. Wednesday, the data showed that the annual inflation rate of Great Britain has slowed down at 2.8 percent in February Due to the lowest clothing prices, a temporary truce is expected before inflation will rise again for most of this year.

Mrs. Reeves promised to stick to rigid tax rules, including a commitment not to borrow for the day to send by the end of the decade and also for the fall of national debt. And so, he tried to reconstruct a tax bearing against these rules to reassure foreign investors, who can punish on any signal of fiscal irresponsibility and send loan costs, as during Liz Trussi premiership at the end of 2022.

“The British people saw what happens when a government borrows beyond its means,” said Mrs. Reeves, adding that her tax rules were “non -negotiable”.

The office for the liability of the budget has confirmed that cuts in well -being and aid abroad measure the repression of tax evasion and Changes to the planning system Making easier to build houses and infrastructures meant that the government would still have a bearing in line with its tax rules.