The UK government on Thursday unveiled a £55 billion ($66 billion) fiscal plan in an effort to plug a hole in public finances and restore Britain's economic credibility, even as the country is mired in recession.
Chancellor of the Exchequer Jeremy Hunt, outlined around £30 billion in spending cuts and £25 billion in tax rises.
The measures include a six-year freeze on the income tax threshold and lowering the top rate of income tax to £125,000. This move is in direct contrast to the massive cuts touted in September's disaster mini-budget.
"Unfunded tax cuts are as risky as unfunded spending," Hunt told the House of Commons.
Hunt said the move would reassure the market that the government and the Bank of England were now working more 'fairly'.
The measures are expected to ease the burden on Britons and allow them to weather the country's worst cost of living crisis in decades and recession.
However, Hunt said they were necessary to limit soaring inflation and restore the U.K.'s reputation
Among the other measures announced were a 10% rise in pensions, benefits and tax credits, in line with September inflation figures and an increase in the National Living Wage from the current level of £9.50 an hour for those aged 23 and over.
Thursday's statement was accompanied by a long-awaited set of projections from the Department for the Budget to get a picture of the UK economy. Hunt said projections show that the U.K. is currently in recession, but the government's plans will ensure that the downturn can be tackled and that unemployment is lower than initially predicted.
