UK cuts welfare support as economy slows and defense spending grows

The UK government has cut back support for around 3 million families as it seeks to close a hole in its budget caused by rising defense spending and a sluggish economy.

Chancellor of the Exchequer, Rachel Reeves, the UK finance minister, cut back on her plans to increase public spending in order to limit additional borrowing after official projections showed the British economy growing half as fast as expected this year.

The UK government has pledged to increase defense spending to 2.5 percent of the country's national income by 2027 and then to increase further to three percent. The current level is around 2.3 percent. At the same time, Reeves has promised that spending will not exceed government revenues over the coming five years. This has created pressure to find cuts elsewhere.

The left-leaning Labour government has traditionally spent more on welfare and other projects than the centre-right Conservative Party which it replaced in power in July. Prime minister Kier Starmer has sought to blame his predecessors for failing to manage the public finances but has nevertheless enraged some members of his party by pledging cuts to public services.

The Office for Budget Responsibility, an independent body tasked with assessing the impact of government financial policies, predicted that the economy will grow only one percent in 2025 and warned that tariffs suggested by U.S. president Donald Trump could cut one percent from growth in the years to come if they are implemented.

Reeves told the UK parliament that spending cuts were necessary to avoid more borrowing.

"The global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies," she said.