Ibex continues to tumble as austerity plans sink in

The Madrid Ibex has continued on its downward spiral this afternoon (September 28th), as Spain's austerity measures for 2013 begin to sink in.

Presented by the deputy prime minister last night, the budget relies on tax hikes, spending cuts and structural reforms to help reduce the country's gaping deficit – however the announcement has not been welcomed by the Spanish people who are already grappling with a shrinking economy and 25 per cent unemployment.

Soraya Saenz de Santamaria stated that the plan is "a crisis budget designed to exit the crisis".

Among the measures announced are a 12 per cent average cut in ministerial expenditure, a 20 per cent tax on lottery wins above €2,500 (£2,000) and a continued freeze in public sector pay – which has been kept at the same level for three years.

At 15:45 BST, the Madrid Ibex was 1.1 per cent lower – or 92.5 points – to an index value of 7749.80 points.

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