UK faces ‘economic shock’, Chancellor warns

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Chancellor of the Exchequer Rishi Sunak said on Sunday that the UK had come under “enormous pressure” from the coronavirus pandemic and was facing an “economic shock”, although he ruled out any recourse to austerity measures.Sunak is due to present a vast spending plan this week to help the country’s finances recover after Covid-19. However, the economic forecast also shows “the enormous pressure and stress our economy is under,” he told Sky News on Sunday.

People “will soon see the extent of the economic shock exposed,” added the minister in an interview with the Sunday Times, recalling that nearly 750,000 people had lost their jobs since the start of the pandemic.

The chancellor noted that the best thing to do was to support the economy but warned that the state could not continue to borrow at this level indefinitely.

The UK is the country with the second highest number of coronavirus deaths in Europe, with more than 54,600 deaths. In early November, Prime Minister Boris Johnson imposed a four-week lockdown in England, forcing bars, pubs and restaurants to remain closed until December 2.

Following the announcement, the Chancellor unveiled massive aid to support the UK economy, including an extension of the costly short-time working system until March.

Despite his warning, Rishi Sunak has ruled out austerity measures for the time being.

“Now is the time to focus on responding to the crisis and that means, yes, we will frankly borrow a huge amount this year,” Sunak told BBC TV on Sunday. He added that it was the right thing to do for the sake of the UK’s long-term economy and public finances.

The spending plan expected to be announced this week includes £ 100 billion in infrastructure spending. On Saturday, his ministry announced in a statement three billion additional pounds (3.36 billion euros) to be released over a period of one year to help the national health service fight against the impact of the coronavirus.

It would help people get the medical care they need as soon as possible, the Chancellor said.

One-third of the amount would go towards closing the backlog of non-COVID examinations and operations, while hundreds of millions of pounds would have to be spent on mental health.

According to the ministry, the number of people awaiting treatment for more than a year has now fallen from 1,500 in February to 140,000 in September.

Helping the economy comes at a high price: the public deficit could reach £ 400bn in the 2020-2021 budget, which ends in March, while public sector debt topped the £ 2 trillion mark for the first time. time.

Le Brussels Times

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