Nice one, Rhapsody! Another excellent post on this site that bears a fair bit of thinking about. I agree with others on this thread that you need to start with more kit while you're learning. In any case, most outdoor kit I get is with a view to hunting, Scouting, and then bushcraft, in that order (so I guess I'm a hobby bushcrafter :shock: !). Anyway, on to the budget kit:
Knife: I'd suggest starting with an Opinel No. 7, cheap as chips, easy to sharpen, blade locks nicely, better than locking SAKs. Costs about 6 euro here. Learn to use and care for it, then move on to fixed blades.
Chopping: First I was going to say it's the one thing I'd spend good money on, but then remembered that I used a cheapo hatchet to practise my sharpening skills (especially removing nicks) before attempting same on my Gransfors! Get a cheap one, get to know how to care for it, then trade up if you want to and you'll really appreciate a proper axe!
Sleeping bag: OK, so if you're not going to be out in January or camping at 200m plus, then what's wrong with a three season from Millets in the Jan sales? Most of Southern Britain is a lot warmer than the West of Ireland, and a two season is fine here through the Summer.
Shelter: 3mx2m green tarps with grommits for about 5 euro from Lidl.
Fire: Firesteels aren't that expensive, but as I struggle with them, I'd also bring some matches!
Cooking: Well, I use a Trangia (family sized) so I can't comment. The old coffee tins seem to make sense....
Water: I'm frequent user of the old coke bottle, myself!
Utensils: Hey, how much quality do you need? Re-cycle the plastic ones from fast-food joints.
Keep an eye on the Lidl and Aldi deals (I'm assuming you have these!) Usually the same stuff comes around periodically. In the last year I have got: 3mx2m tarps with grommits, 5euro; folding saw, 4 euro, one year old, still doing the biz (I use it a lot for hedging, so it gets USED!); Merino wool jumpers, ten euro, toasty, and excellent as a mid layer; first aid kits, 10.99 euro, to German DIN-13164 standard, it has almost everything; aluminium walking poles, 10 euro, can't see any difference between these and the ones in outdoor shops for 4 times the price. Most of the deals on outdoor stuff were around April last year, so start checking the websites before then.