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Wednesday, December 8, 2021

Britain prepares for a post-pandemic economy and continues to spend.

LONDON. On Wednesday, the UK’s chief financial officer set out his vision for the country’s post-pandemic economy, announcing plans to spend on education, national health and skills development. But his plans may be overshadowed by the recent surge in inflation and supply chain disruptions that are holding back recovery from the pandemic.

“Today’s budget does not draw a line to Covid, we have difficult months ahead,” Rishi Sunak, Chancellor of the Ministry of Finance, told MPs on Wednesday. “But today’s budget is really starting work to prepare for the new economy after the coronavirus.” It will be “an economy suitable for a new era of optimism,” he added.

The Chancellor made arguments for optimism, despite the country approaching what is expected to be a tough winter for many households and uncertainty over the path of the pandemic.

Inflation is projected to surpass 4 percent, potentially peaking around 5 percent, while surges in energy prices are affecting household bills. Supply chain disruptions and shortages persist, and a major government benefit is being cut for the poorest families. The number of coronavirus cases has begun to rise again – an average of more than 46,000 cases per day compared to 2,000 last summer – and pressure is mounting on the government to reinstate some restrictions, such as mandatory face masks, vaccine passports and advice for people to work from home.

Mr Sunak said price rises are a global problem created by the unblocking of the economy and the demand for goods that is growing faster than companies and their supply chains can handle.

“I understand that people are worried about global inflation,” said Mr Sunak. “But they have a government at home, ready and willing to act.” He reaffirmed the obligation of the Bank of England to maintain inflation at a “low and stable level.” The central bank is aiming for an annual rate of 2 percent.

The Fiscal Responsibility Office, which provides independent economic and fiscal forecasts for the government, said Wednesday that supply problems in the UK were “exacerbated by changes in migration and trade regimes since Brexit.” Over the next few quarters, the agency said labor shortages, higher energy prices and blockages in supply chains will stifle economic growth and drive inflation, potentially to its highest level in three decades.

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However, he raised his forecasts for economic growth and lowered forecasts for loans.

Many of Mr Sunak’s most important policy decisions were announced days before his speech in parliament, including tens of billions of pounds spent on the National Health Service and public transport, and a nearly 7 percent increase in the minimum wage to £ 9.50 ( USD 13.05). Other expenses include plans to build houses on abandoned plots, and more money to qualify young people and adults.

Among the statements made on Wednesday were tax breaks on research and development spending; 50 percent discount on business rates, which is a type of property tax, for retail and hospitality businesses; a revised taxation procedure for alcoholic beverages, which will lead to a reduction in the cost of draft beer and sparkling wine; tax breaks for museums and theaters; and a £ 1.4 billion investment fund.

Mr. Sunak also announced the results of the expenditure review, which outlines public spending priorities for various agencies over the next three years. It was postponed last year due to the pandemic.

Mr Sunak is also trying to balance his own instincts to be financially cautious and cut back on borrowing after they hit wartime levels, against the wishes of Prime Minister Boris Johnson, who said the UK is on track to be well-paid. , high. – the productivity of the economy, and who is willing to spend to achieve this goal and “level up” a country that has suffered from long-term regional inequality.

“Last year, the size of the state exceeded half of the economy as a whole,” said Mr Sunak. “Taxes are rising to the highest percentage of GDP since the 1950s. I don’t like it, but I can’t apologize for that. ” He said it needed to be done due to the scale of the crisis caused by the pandemic.

“But now we have a choice,” he added. “Do we want to live in a country where every question is answered:“ What is the government going to do about it? “”

But for now, Mr. Johnson’s instincts for spending are still there. By the end of 2024, government spending will increase by almost 4 percent per year. “Each department will see a real increase in overall spending,” said Mr Sunak.

World Nation News Deskhttps://www.worldnationnews.com
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