New Finance Minister Unveils Major Spending Cuts Amid Budget Crisis

Newly appointed UK Finance Minister, Rachel Reeves, announced spending cuts of £13.5 billion over two years to address a £22 billion overspend by the previous government. Reeves accepted recommendations for public sector pay hikes and vowed difficult choices to prevent a 25% budget deficit increase.

Britain's newly appointed Finance Minister, Rachel Reeves, has announced substantial spending cuts amounting to £13.5 billion over the next two years in an effort to mitigate a £22 billion overspend attributed to the previous government.

Reeves also confirmed her acceptance of independent recommendations for public sector pay hikes, framing her statement as a necessary step to avoid future tax increases. She criticized the former Conservative administration for obscuring the actual state of government spending, necessitating immediate, tough decisions to avert a projected 25% rise in the budget deficit this year.

'The scale of this overspend is not sustainable. Not to act is simply not an option,' Reeves declared in parliament. Her statements follow a review of public finances initiated upon her assumption of office, revealing a significant funding shortfall that had been reported prior to her address. The Conservative party dismissed her accusations, arguing Labour is using them as an excuse to introduce tax hikes. Despite scepticism from some economists, Labour maintains it will adhere to its election promise not to increase main tax rates, with any tax changes deferred to the formal budget statement later this year. ($1 = 0.7795 pounds)

(With inputs from agencies.)