March 26 (UPI) -- The British finance minister announced Wednesday billions in welfare budget cuts to fill a shortfall with stalled growth and higher borrowing costs since the government's first spending plan.
"The responsible choice is to reduce our levels of debt and borrowing in the years ahead so we can spend more on the priorities of working people," Chancellor of the Exchequer Rachel Reeves told members of parliament in her spring statement.
Reeves, 46, gave her remarks along with the government's latest economic forecasts from Britain's independent public finance watchdog, the Office for Budget Responsibility.
On Wednesday, the Labor Party leader indicated that her "non-negotiable" policy goals of "stability" and "investment" would likely meet its metrics two years earlier than expected.
The OBR, according to Reeves, downgraded Britain's growth forecasts for this year and halved its previous estimate of 2%.
"I am not satisfied with these numbers," she said. "That is why we on this side of the house are serious about taking the action needed to grow our economy."
Reeves added that while OBR upgraded growth projections for 2026 "and every year thereafter," it predicted GDP growth of under 2% for next year, 1.8% in 2027, 1.7% in 2028 and 1.8% in 2029.
"By the end of the forecast, our economy is larger compared to the OBR's forecast at the time of the budget," she said, adding at the end of her remarks how "the world is changing."
Reeves also spelled out plans for investment spending and efforts to shore up tax avoidance and evasion to up Treasury revenue.
Reeves, warning that "we are living in an uncertain world," stated that British defense spending would increase to 2.5% of GDP with a reduction in aid for overseas business.
Official numbers have estimated that the British economy grew by just 0.1% between October and December with a shrinking of 0.1% in January.
"We can see that and we can feel it," Reeves stated. "A changing world demands a government that is on the side of working people. Acting in their interest. Acting in the national interest. Not retreating from challenges."
Following her spring statement, the OBR published economic forecasts in which it said Reeves had restored the exchequer's fiscal "headroom" amid a "risky outlook."
"Before accounting for policy, higher debt interest costs and other forecast changes left the current budget in deficit by (more than $5 billion) in 2029-30," the OBR says. "Policy changes, including welfare reforms and day-to-day departmental spending reductions, restore it to the ($12 billion) surplus the Chancellor had in October," it added.