Britain's Treasury chief George Osborne said Wednesday the country's government will make the largest cuts to public spending since World War II — slashing benefits and public sector jobs in a five-year austerity plan.
Osborne confirmed he had ordered 83 billion pounds ($130 billion) in spending cuts through 2015, which he claims are necessary along with tax increases to wipe out a spending deficit that reached 156 billion pounds last year.
As many as 500,000 public sector jobs will be lost, welfare payments sharply reduced and dozens of scheduled government programs halted. He said that even Queen Elizabeth II would take a hit, cutting her royal household budget by 14 percent over four years under the plans.
"It is a hard road, but it leads to a better future," Osborne told lawmakers in a long anticipated statement to outline the coalition government's long-term economic plans.
Not much reaction on the FTSE, and not much movement on gilts either.. Perhaps markets had already priced this in.