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Osborne Levies Banks, Raises Sales Tax to Cut Deficit

U.K. Prime Minister David Cameron will impose a levy on banks and raise the sales tax in what the government called its biggest peacetime deficit cut, seeking to guard the top credit rating without stifling economic recovery.

Lowering forecasts for growth to 1.2 percent this year and 2.3 percent in 2011, Chancellor of the Exchequer George Osborne announced a freeze on public workers’ pay and subsidies for children along with a reduction in housing benefits. Capital- gains taxes were raised and corporate-profit taxes cut.