LONDON — U.K. Chancellor Rishi Sunak dished out more borrowed cash with one hand — but began the economic claw back with the other.
With a dire economic forecast and a need to support jobs and the state through the remainder of the coronavirus crisis, Sunak’s one-year departmental spending review Wednesday put off much, but not all, of the pain that will have to come as Britain recovers from the pandemic.
Meanwhile, he hinted at what his fiscal ideology might look like in future and managed to dodge the Brexit issue — although fiscal watchdogs did not.
Here are the six things you need to know:
1. Coronavirus is still king
A plan to set departmental budgets for the next year was always going to be dominated by the COVID crisis, following the biggest hit to the economy since the Second World War and with England still in a national lockdown.
Sunak announced a raft of spending to help the U.K. grapple with the virus in the coming year, amounting to £55 billion in total.
It included £18 billion for testing, personal protective equipment and vaccines; £3 billion to help the National Health Service cope with added pressures; more than £2 billion to keep transport routes running; more than £3 billion for local councils; and £250 million to help end rough sleeping. All in all, the U.K. will have spent around £300 billion grappling with COVID-19.
Sunak set the tone at the very start of his speech: “Our health emergency is not yet over. And our economic emergency has only just begun.”
2. The economic outlook is bad … like, really bad
The headline news from the spending review was the eye-watering economic forecasts Treasury watchdog the Office for Budget Responsibility published alongside Sunak’s announcements.