Britain's government unveiled a tax-raising budget Wednesday welcomed by financial markets, as its hard-hitting action aims to slash state debt as well as fund public services.

After finance minister Rachel Reeves boosted Labour's budget headroom by £22 billion ($29 billion), the pound gained strength versus the dollar and euro, while UK government bond yields lowered.

Markets appeared to look past the government's downgrades to British economic growth, from next year until the end of 2029, in data released alongside the annual budget.

- 'Stable economy' -

"My choices are a budget for fair taxes, strong public services, and a stable economy," Reeves told parliament Wednesday, as Britain faces a £20-billion gap in public finances.

Ahead of the budget, Prime Minister Keir Starmer vowed

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