The speech, read out in a traditional ceremony of pomp and pageantry, contained a number of bills that include policies on political reform and cuts to public services and government departments.

EU powers

The reforms include measures to provide for fixed-term parliaments and powers to enable voters to eject legislators found guilty of serious wrongdoing.

The government also proposed legislation to give British people a say on any transfer of powers to the European Union.

The new programme echoed a detailed coalition agreement published last week, and the Treasury has already set out plans to trim an initial $9bn from the deficit.

Figures published earlier on Tuesday showed Britain's economy grew by 0.3 per cent in the first quarter of the year in a modest recovery from an 18-month recession.

The coalition, led by David Cameron, the Conservative prime minister, and Nick Clegg is enjoying a political honeymoon, with media largely supportive and markets calmed by first steps on the deficit.

An ICM poll published in British daily the Guardian newspaper on Tuesday found nearly two-thirds of voters approved of the coalition.

However, some politicians from both of the parties are uneasy about the compromises involved in coalition and traders will be looking for more details next month of cuts to come.