Published:Wednesday, 25 Nov 2020 03:11
The “economic emergency” caused by Covid-19 has only just begun, according to chancellor Rishi Sunak, as he warned the pandemic would deal lasting damage to growth and jobs.
Official forecasts now predict the biggest economic decline in 300 years.
The UK economy is expected to shrink by 11.3% this year and not return to its pre-crisis size until the end of 2022.
Government borrowing will rise to its highest outside of wartime to deal with the economic impact.
The government’s independent forecaster, the Office for Budget Responsibility (OBR) expects unemployment to jump to 7.5% next year, with a million more people out of work.
This is the highest jobless rate since the financial crisis in 2009.
However, fewer jobs are expected to be lost than predicted this summer.
Setting out his Spending Review detailing how much would be spent on public services, Mr Sunak said the government was dealing with an “economic emergenc”y. “That’s why we have taken, and continue to take, extraordinary measures to protect people’s jobs and incomes,” he added.