2020 Budget – the economic picture
Within his 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 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.