LONDON (UK) – British finance minister Rishi Sunak will free up more cash on Wednesday with the heaviest public borrowing since World War Two in the backdrop.
Sunak will announce extra investment to ease a backlog in the health system. It aims to counter a surge in unemployment and build new infrastructure in a one-year Spending Review that he is likely to deliver to parliament at around 1230 GMT.
As Britain will make its full exit from the European Union approaching on Dec. 31, no new trade agreement has yet been secured. Sunak is likely to announce more spending on customs operations and possibly replacement subsidies for farmers.
The Bank of England forecasts an 11% slump – and its recovery has been weaker than those of other big economies.
Sunak says it is not the right time to rein in spending or raise taxes to address the deficit.
In a newspaper interview at the weekend, the 40 year-old former Goldman Sachs analyst said he would start to “look forward” in the spring so as to fix the deficit, if vaccines and infection tracking turn the tide of the pandemic.
But Paul Johnson, director of the Institute for Fiscal Studies think tank, said the wide range of demands thrust upon Sunak in the coming years indicate that spending was only likely to increase.
“Given what’s happened to the size of the economy, that can only mean one thing for taxes. They, too, could be set on an inevitable, if delayed, upward trajectory by decisions made this week,” he said in an article published in the Sunday Times.