2020 Budget: The economic picture
Within his 2020 Budget speech, Chancellor Rishi Sunak unveiled extra funds to support UK workers and businesses affected by the outbreak of the coronavirus, and additional funds to help the NHS combat the virus.
The Chancellor warned that the spread of the coronavirus will have a ‘significant impact’ on the UK economy in the coming months.
In its 2020 Budget report, which was prepared before the outbreak of the coronavirus, the Office for Budget Responsibility (OBR) revealed that the UK economy is set to grow at its slowest pace since the 2008 financial crisis. It reduced its growth forecast for 2020 from 1.4% to 1.1%.
This represents the weakest growth since 2009, and does not take into consideration the effects of the coronavirus. However, the OBR also revealed that growth is likely to rebound in 2021 as a result of a government spending boost. The OBR anticipates growth to rise to 1.8% in 2021.
Meanwhile, the government expects to borrow nearly £100 billion more in this Parliament than previously expected in order to fund a ‘significant’ rise in public spending. According to official documents, this money will be accounted for in the next Budget this autumn.