The new budget has been met with angry protests.

"Eighty percent, four-fifths of dealing with this deficit that we are now in, through the bankers and all the problems that they caused, is to be borne by public services workers and the services that they provide," said Dave Prentis general secretary of the public service union, 'Unison'.

Britain's government spent more than $1.25 trillion on bailing out banks following the economic crisis. It has helped push the deficit in Britain to more than 11 percent of GDP, one of the highest debts in Europe.

The government says Britain, like Greece or Spain, is in danger of losing its triple-A credit rating, so it is slashing spending to balance the books.

Susan Anderson from the Confederation of British Industry, which represents private businesses, says the government is right to take drastic action.

"The U.K. is facing a considerable period of austerity," said Anderson. "We have got one of the highest deficits in the OECD, we know we need to take action. We think the government has taken the right balance between cutting public spending and some tax increases."

With its own sterling currency, Britain has been able to keep the euro currency crisis at arm's length. But Europe is Britain's biggest trading partner, and any problems there hit the British economy.

Economics Professor Wendy Carlin, of University College London, says there is a further risk that simultaneous cuts across the continent will make things worse.