LONDON (BLOOMBERG) – The United Kingdom’s finance minister Rishi Sunak is set to spend billions of pounds in extra support for the economy over the next four months, as pandemic curbs pushed unemployment to its highest level in almost five years.
The chancellor of the exchequer will set out the details in his Mar 3 budget after Prime Minister Boris Johnson outlined a plan for reopening the UK economy that keeps some businesses closed until at least June 21.
Mr Sunak on Tuesday (Feb 23) suggested support will extend beyond the end of lockdown measures as he seeks to spur economic recovery.
“At the budget next week I will set out the next stage of our plan for jobs, and the support we’ll provide through the remainder of the pandemic and our recovery,” the chancellor said in an e-mailed statement. “I know how incredibly tough the past year has been for everyone.”
Mr Johnson’s four-step road map for lifting the lockdown will influence how fast Treasury subsidies are withdrawn, according to people familiar with the matter. Key aid programs are currently due to end as early as next month but Mr Sunak will extend assistance so that companies and individuals do not face a cliff-edge, they said.
Mr Dan Hanson of Bloomberg Economics said extending support to mid-year could come at a cost of about 18 billion pounds (S$33.5 billion).
Mr Hanson’s estimate includes as much as 7 billion pounds for furloughed workers, 5 billion pounds for the self-employed, 750 million pounds to extend the reduced sales tax rate, and one-off grants totaling 5 billion pounds in lieu of extending the business rates holiday.