Sunak Spending Boost to Ease ‘Enormous Strain’ on U.K. Economy

U.K. Retailers Face Christmas Nightmare With Fresh Lockdown
Photographer: Simon Dawson/Bloomberg

Chancellor of the Exchequer Rishi Sunak said he will increase spending on public services this week in a bid to shore up the U.K. economy amid the “enormous stress and strain” of the coronavirus pandemic.

The chancellor will use his spending review on Wednesday to roll over budgets for most government departments for the next year and to boost budgets for the National Health Service and infrastructure development, he said on Sunday.

“You will not see austerity next week,” Sunak said in an interview with Sky News. “What you will see is an increase in government spending on day-to-day public services, quite a significant one, coming on the increase that we had last year. Primarily, the focus will be on fighting coronavirus.”

Forecasts from the Office for Budget Responsibility will show the stress the economy is under and ministers are looking at the economic effect of measures to stop the spread of the pandemic “in the round,” Sunak said. He refused to answer questions about potential tax rises, saying Wednesday’s announcement is focused on departmental spending.