Following the United Kingdom’s plunge into economic recession, the Chancellor of the Exchequer, Rishi Sunak, has said that the country’s economy is heading for the worst drop in 300 years. According to him, this will be UK’s worst recession in 300 years.
Rishi told the parliament on Wednesday that investment was vital to aid economic recovery.
Britain has since unveiled plans for more massive state spending despite soaring debt on coronavirus fallout, including pay rises for nurses to support the economy as the nation embarks on its post-Brexit future.
According to The Irish Times, the UK economy, which sank into a historic recession owing to pandemic fallout, was forecast to rebound by 5.5 per cent next year and by 6.6 per cent in 2022.
But Rishi Sunak has said that the nation’s gross domestic product was not expected to return to pre-virus levels until the fourth quarter of 2022.
Britain has been one of the worst-affected countries in the world in the Covid-19 outbreak, registering almost 56,000 deaths.
“Our health emergency is not yet over and our economic emergency has only just begun,” Sunak said on Wednesday as he unveiled the latest spending review of Prime Minister Boris Johnson’s government.
“So our immediate priority is to protect people’s lives and livelihoods,” the Chancellor added.
With UK public debt set to soar further owing to Wednesday’s spending commitments and the huge sums already paid out to support the economy during the pandemic, Sunak said “sticking rigidly” to the country’s overseas aid budget was “difficult to justify to the British people”.
He said the aid budget would be reduced to 0.5 per cent of gross national income, and return to 0.7 per cent “when the fiscal situation allows”.
Sunak’s updates comes a week before England ends a second lockdown aimed at curbing a fresh wave of coronavirus infections. The review was presented also with Britain yet to strike a post-Brexit trade deal with the European Union ahead of a transition period ending December 31.