After borrowing surge, UK's Sunak to announce more spending
25 Novembre, 2020, 22:11 | Auteur: Auguste Feret
During his address, Sunak said his immediate priority was to protect people's lives and livelihoods as the country continues to battle the Coronavirus outbreak.
He spoke of the Government making tough choices, but one imagines the Prime Minister would prefer it if Number 11 remains the bearer of bad news when the time comes, rather than Number 10.
Without giving a timetable, he said that the government aims to return to the target first laid out by the Labour government of Tony Blair in 2004.
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He said the target would be "difficult to justify to the British people" at a time of such domestic hardship but insisted the United Kingdom would remain the second highest aid donor among G7 nations.
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"Our health emergency is not yet over and our economic emergency has only just begun", Sunak commented as he unveiled the latest spending review of Prime Minister Boris Johnson's government.
The Office for Budget Responsibility forecasts the economy will shrink 11.3% in 2020 and public-sector borrowing for the fiscal year ended in March will reach 394 billion pounds ($526 billion), equivalent to nearly 20% of national income, Treasury Chief Rishi Sunak told lawmakers. As a result the output lost during the pandemic won't have been recouped until the final quarter of 2022.
Sunak warned that the pandemic's cost will create long-term "scarring", with the economy 3% smaller in 2025 than predicted in March, before the spring lockdown.
The massive fall in output this year has led to a huge increase in government borrowing as the government sought to cushion the blow.
Mr Sunak said £280 billion was being spent on the coronavirus response this year.
The government will spend a whopping £100 billion on capital spending for infrastructure, Sunak said, £27 billion more "in real terms" than previous year, including on new housing, fast broadband to 5 million business premises, and 4G connectivity. Unison, the union representing public sector workers says £5 a week is negligible and these key workers should not be bearing the brunt of the costs of the pandemic - as they are the ones helping to combat it.
Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets, will be watching how the Bank of England reacts to Sunak's spending plans to see whether it maintains a significant degree of quantitative easing over the medium-term after a larger than expected increase in the support measure earlier this month.
Wales has been betrayed on post European Union funding in a Spending Review that does not support a fair recovery across the UK."Mr Sunak's announcement on the review for spending across the UK included a freeze on public sector pay apart from NHS workers and the lowest paid".
The pubic sector pay freeze announced by Rishi Sunak will be keenly felt in Wales.
He said that while the government would give pay rises to more than one million nurses, doctors and others working for the state health service, the offer could not be extended to other public-sector workers.
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It could cause structural damage, uprooting of trees, damage to thatched and tin houses, and damage to banana and paddy crops. Authorities have so far evacuated 528 people and 150 more relief shelters are being readied in the city, officials said.
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