The UK Chancellor Rishi Sunak faces worst hit to UK finances since second world war

The Chancellor has decided to conduct a one-year Spending Review on 25 November in order to prioritise the response to Covid-19, and his focus on supporting jobs.

Reports claim the Government's forthcoming Spending Review, containing the largest downgrade in economic performance and the public finances since the second world war, will reveal the UK's economy will contract by almost 11% in 2020, the worst annual performance for more than three centuries.

The Financial Times said, based on previous Office for Budget Responsibility and Bank of England statements, the Chancellor Rishi Sunak is likely to publish forecasts showing the country's economy would still be reeling from the impact of Covid-19 by the time of the next general election in 2024.

But that hasn't stopped Boris Johnson announcing plans for the 'biggest programme of investment in Britain's armed forces since the end of the Cold War'.

Officials said it would cement the UK's position as the largest defence spender in Europe and the second largest in NATO.

Spending Review will focus on three areas:

·         providing departments with the certainty they need to tackle Covid-19 and deliver the Plan for Jobs to support employment

·         giving the vital public services enhanced support to continue to fight against the virus alongside delivering first class frontline services

·         investing in infrastructure to deliver the ambitious plans to unite and level up the country, drive our economic recovery and Build Back Better

That means the government will continue to deliver on their commitments and the priorities of the British people – and to do so the Spending Review will confirm multi-year capital spending for key programmes where certainty is needed to ensure no time is lost in delivery.

Rishi Sunak, said:

“In the current environment its essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs.”

Long term investment in our country’s future is the right thing to do, especially in areas which are the cornerstone of our society like the NHS, schools and infrastructure. We’ll make sure these areas crucial to our economic recovery have their budgets set for further years so they can plan and help us Build Back Better.”