Alistair Darling, Britain's finance minister, has announced a range of measures aimed at attempting to revive the country's economy in a bid to stop a recession turning into a slump.

The minister's pre-budget report on Monday included a cut in Britain's sales tax from 17.5 per cent to 15 per cent and an injection of an extra $30bn into the economy.

Darling's plans to plug the hole in state finances by raising taxes in the future included a major political shift in the form of a sharp rise in income tax for high earners.

The minister announced that the top rate of taxation, for those earning above $225,000 a year, will rise to 45 per cent, from 40 per cent, in April 2011.

Recessionary slide

Britain is already sliding into recession with house prices slumping, unemployment rising and manufacturing output shrinking.

Darling hopes that the cut in sales tax to 15 per cent, the lowest level allowed by the European Union, will boost consumers' spending power before Christmas.

The cut is to be reversed after one year.

In March, Darling forecast economic growth of about two per cent this year and around 2.75 per cent next year.

In Monday's address, he dramatically cut growth forecasts for 2009 to between -0.75 per cent and -1.25 per cent, the largest ever downward revision by a UK finance minister.

Although the handling of the financial crisis by Gordon Brown, the British prime minister, has lifted his declining popularity, a poll published on Sunday still showed his Labour party trailing the opposition Conservatives by 11 points, a wider margin than some other recent surveys.

His chances of winning the next election, due by mid-2010, may depend on the recession being relatively short and shallow, but that is looking increasingly unlikely.

Germany, the Netherlands and Spain have already announced stimulus plans.

A European Union package, worth up to $163bn, will be unveiled on Wednesday.