Relief meets fear as UK budget calms economy but brings pain

By JILL LAWLESS
Associated Press

LONDON (AP) — Britain’s Conservative government is defending its decision to hike taxes for millions of working people in the “squeezed middle” class as it tries to shore up an economy battered by double-digit inflation. An emergency budget announced Thursday includes 25 billion pounds ($30 billion) in tax hikes. Combined with high inflation and stagnating salaries it’s forecast to bring a 7% decline in U.K. living standards over the next two years. The director of the Institute for Fiscal Studies think tank said, “The truth is, we just got a lot poorer.” Treasury chief Jeremy Hunt said the steps he was taking meant a predicted recession would be “shallower” than it otherwise would have been