The Chancellor of UK, Mr. George Osborne has increased the VAT from 17.5% to 20%. He has also cut the welfare spending as he wanted to tackle the record debts of Britain. 25% cut from public service spending will be implemented but the tobacco, fuel and alcohol won't have any tax rise.

Unveiling his first budget in front of the MPs, Mr. Osborne has described the budget as tough but fair to tackle with the unavoidable debt crisis.

The child benefit and the public sector pay will be frozen in the new budget. Some of the groups are against the budget. The Labour party has expressed its dissatisfaction over the budget.

Some of the economic experts have considered the budget as a defining moment in the economic recovery of the UK. The Chancellor has vowed to balance the economy of UK within next five years with the amount of savings to come from the cuts to public services and cuts to benefits rather than the tax hikes. This decision is said to be the biggest gamble in the UK economy till date taken by any Chancellor. The outcome of this plan will set the future of the UK economy.