British Chancellor of the Exchequer Rishi Sunak told British lawmakers that the Office of Budget of Responsibility (OBR) did not expect the economy to return to its pre-coronavirus levels until the end of 2022
The British economy is forecast to shrink by 11.3 percent this year, the worst recession in more than 300 years in the country as a result of the coronavirus crisis, British Chancellor of the Exchequer Rishi Sunak said Wednesday.
The chancellor told British lawmakers that the Office of Budget of Responsibility (OBR) did not expect the economy to return to its pre-coronavirus levels until the end of 2022.
Sunak said the fiscal damage of the pandemic was "likely to be lasting" and cited figures from the OBR that predicted unemployment to peak at 7.5 percent, or 2.6 million people, in the second quarter of 2021.
He warned that the "economic emergency has only just begun" as he unveiled his first Spending Review in the wake of the coronavirus crisis.
In the Spending Review, he said the British government has spent 280 billion pounds (about 374.1 billion US dollars) on its response to the coronavirus crisis and intends to spend a further 55 billion pounds (about 73.5 billion dollars) next year to tackle the pandemic.
Meanwhile, the public borrowing is set to stand at 394 billion pounds (about 526.4 billion dollars) in the current 2020/21 financial year, equivalent to 19 percent of Britain's gross domestic product (GDP), said Sunak.
To fuel growth and support jobs, he said that Britain is estimated to spend 100 billion pounds (133.6 billion dollars) of capital expenditure next year on infrastructure.
In addition, Britain will establish a new infrastructure bank -- headquartered in the north of England -- to work with the private sector to finance major new investment projects across the country, he said.
Sunak's remarks came just one day after Britain recorded the highest daily Covid-19 death toll since May 12 on Tuesday.
The coronavirus-related deaths in Britain rose by 608 to 55,838, marking the highest daily death number since May 12, according to official figures released Tuesday.
To bring life back to normal, countries such as Britain, China, Germany, Russia and the United States are racing against time to develop coronavirus vaccines.