The changes come as President Trump’s tariff threats have disrupted global trade and added pressure to the British government’s already strained budget.
The British government on Wednesday laid out plans for higher military spending and cuts to social benefits, as it sought to keep the nation’s finances on track in what it called a “more uncertain world.”
Rachel Reeves, the chancellor of the Exchequer, said there would be an extra 2.2 billion pounds ($2.8 billion) for defense in the fiscal year that begins next month. And she reiterated recently announced reductions to the benefits system that were expected to save about £5 billion by 2030.
The changes come as President Trump’s economic policies have disrupted the global economy, putting more demands on the British government’s already stretched budget. Like many other European countries, Britain has pledged to spend more on defense to support Ukraine against Russia. At the same time, the threat of a global trade war is lurking and interest rates have increased, pushing up government borrowing costs.
“Our task is to secure Britain’s future in a world that is changing before our eyes,” Ms. Reeves said in Parliament on Wednesday.
“The job of a responsible government is not simply to watch this change,” she added. “This moment demands an active government.”
Adding to the hurdles, the British economy slowed in the second half of last year, and the Office for Budget Responsibility, an independent watchdog, halved its forecast for growth this year to 1 percent from 2 percent.
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Source: Elections - nytimes.com
