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British finance minister Rishi Sunak cut fuel duty and softened some of a looming payroll tax increase this week as he sought to alleviate a severe cost-of-living squeeze against the backdrop of slowing economic growth.

But with inflation set to hit a 40-year high of nearly 9% later this year, government forecasters said Britons faced the biggest hit to their living standards since records began in the late 1950s — even after Sunak's measures...

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