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Rachel Reeves to Announce Welfare Cuts and Infrastructure Investments in Spring Statement

The UK Chancellor is set to outline £5 billion in welfare cuts, £2 billion in civil service reductions, and defense spending reallocations as economic pressures mount.

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Overview

  • Rachel Reeves will deliver the Spring Statement on March 26, confirming £5 billion in welfare cuts and £2 billion in civil service reductions to meet strict fiscal rules.
  • The Office for Budget Responsibility is expected to halve its 2025 growth forecast from 2% to 1%, exacerbating fiscal challenges.
  • The government plans to reallocate £6 billion from international aid to defense spending, raising defense expenditure to 2.5% of GDP by 2027.
  • Infrastructure projects, including the £10 billion Lower Thames Crossing and Northern rail link upgrades, will be prioritized to stimulate economic growth.
  • Labour MPs and trade unions are voicing strong opposition to austerity measures, warning of potential strikes and political fallout over cuts to public services.