The U.K. government on Thursday unveiled a sweeping £55 billion ($66 billion) fiscal plan as it seeks to plug a gaping hole in the public finances and restore Britain’s economic credibility, even as the country teeters on recession.
Finance Minister Jeremy Hunt, in his hotly anticipated inaugural Autumn Statement, outlined around £30 billion in spending cuts and £25 billion in tax hikes.
The measures included an extra two-year freeze on income tax thresholds and a lowering of the top rate of income tax to £125,140 — moves directly opposed to the major cuts touted in September’s catastrophic mini-budget.
“Unfunded tax cuts are as risky as unfunded spending,” Hunt told the House of Commons.
Hunt said the measures would reassure markets that the government and the Bank of England are now working in “lockstep.”
“We need a fiscal and monetary policy to work together,” he said. “That means the government and the Bank working in lockstep. It means, in particular, giving the world confidence in our ability to pay our debts.”