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Sunak is due to announce the UK government’s autumn budget at 12:30 p.m. London time. In a statement released ahead of its official announcement, Sunak said the budget would begin “the work of preparing for a new post-Covid economy.” He added that the budget would help build an economy “worthy of a new era of optimism”.
A number of measures to be included have already been reported by the UK press.
This includes allocating £ 5.9bn ($ 8.1bn) to the UK’s National Health Service to help clear the backlog of people waiting for tests and scans, due to the pressure on the healthcare sector by the coronavirus pandemic.
Sunak is also expected to hand over £ 6.9 billion to cities outside London to improve their public transport infrastructure.
It is also expected to confirm an increase in the UK’s national living wage from £ 8.91 per hour to £ 9.50, which is expected to take effect on April 1.
The UK government is also expected to end the pay freeze for public sector workers, such as teachers and nurses, as part of this budget.
Other key budget spending plans include £ 2.6 billion to create 30,000 new school places for children with special educational needs and disabilities.
An additional £ 1.6bn should then be spent on rolling out new ‘T-levels’, or technical skills, for 16-19 year olds.
He said Sunak’s target of increasing government spending to 3% of the UK’s gross domestic product would be a “significant part of recent years”.
However, he added that it would be essential to “focus on the details” as to the allocation of these expenses by Sunak.
“If it’s investment-oriented, I think about a third will be, that should be positive for longer-term growth potential, but we should keep an eye out for things like minimum wage increases. , corporate taxes, because if it goes too far in those directions it could cause economic problems, ”said Pickering.
As to whether Sunak would announce measures to help consumers cope with the recent surge in energy prices, such as a reduction in VAT (sales tax), Pickering said it was “generally very difficult for chancellors to tweak the economy in the short term. “
However, he said, no announcement in this area would “significantly change the outlook for consumption.”
Asked whether Sunak is setting aside a “rainy day fund” as part of the budget, Pickering said such an announcement would be a “misnomer.”
He said this implied that the UK had a restriction on how much it could spend and borrow in the short term, when it was actually up to the Chancellor to decide whether to reduce the UK’s debt or to borrow to finance its expenses.
“If he’s setting up this rainy day fund, it’s purely for politics and theater, it has no economic relevance in my opinion,” Pickering said.