Billion-pound loans and the sharp drop in national income during the Covid-19 pandemic have set the stage for the UK to face an “economic shock”, Chancellor Rishi Sunak said on Sunday, as the Britons were still eager to reunite with families over Christmas.
Prime Minister Boris Johnson is expected to announce a ‘Covid winter plan’ to be followed through Christmas on Monday. The current lockdown in England will end on December 2, but experts’ caution about easing has caused them to continue to be held back over the Christmas period.
Sunak, whose political action has increased during the pandemic after he extended billions of pounds for license, grants to the self-employed and subsidies to businesses, indicated that income tax should increase next year. Borrowing related to the pandemic has already reached nearly £ 250 billion.
He wrote in The Sunday Times: “People will see the magnitude of the economic impact exposed. We can see the data every month and obviously the shock our economy is facing right now is significant. “
“Once we get over (the crisis) we will have to figure out the best way to return to sustainable public finances. I’m hopeful that by spring, with positive news from both mass testing and vaccines, we can start looking to the future. “
Sunak is due to present the Annual Spending Review in the House of Commons on Wednesday. In addition to the debilitating economic impact of Covid-19, the UK is also facing a hit from January 1, when the Brexit process is complete and the UK moves out of the EU.
The three-tier alert system before the lockdown imposed earlier this month is expected to strengthen with more restrictions at each tier, following criticism that the system was not effective enough. The revised system will be in effect as of December 3.
A prime minister’s spokeswoman said: “Everyone’s efforts during the current national restrictions have helped control the virus, slow its spread and ease pressure on the National Health Service.”
“But it is clear to the prime minister and his scientific advisers that the virus is still around and, without regional restrictions, it could quickly spiral out of control again before vaccines and massive testing have taken effect. That would jeopardize the progress the country has made, and once again risk intolerable pressure on the NHS. “
As of Saturday night, there were 19,875 new cases and 341 deaths in the last 24 hours across the UK.
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