What is an Austerity Budget?

Over the past few years the term austerity has made it into the financial headlines as well as the national news. Austerity means to trim expenses to their minimum. When used in regards to a national budget the goal is to reduce the amount of money that the government spends or to increase the governments' income. During times of austerity, which is usually during an economic crisis it is almost impossible to increase taxes so the government is faced with only one choice and that is to reduce their expenses.

By Barry Norman, Investors Trading Academy.