U.K. Set to Defy Skeptics With Strong Recovery, Johnson Says

Source

Prime Minister Boris Johnson said the U.K. government’s budget this week could pave the way for a stronger economic recovery than pessimists expect.

The statement by Chancellor of the Exchequer Rishi Sunak on Wednesday will spur a “jobs-led” revival that could be “much stronger” than some forecasters have been saying over the past six months, Johnson said in a broadcast interview.

The coronavirus pandemic has forced Sunak to unleash 300 billion pounds ($418 billion) of emergency spending to fight the virus and support businesses over the past year. Both Johnson and the chancellor promised there would be more to come in the budget.

“Throughout this crisis, I’ve always been determined to make sure that the government is doing what it can to provide support to get through this enormously difficult time, and that’s not going to stop,” Sunak said in a video on Twitter on Monday. “People should feel reassured that we are going to continue to be there to support them as we get through this difficult period.”

Ministers see reason for optimism about a U.K. recovery coming from a successful coronavirus vaccination program, which already has delivered at least one dose to more than 20 million adults.

Getting Through This

“We have to believe that there is light at the end of the tunnel now,” said Sunak, echoing Johson’s optimistic tone. “We will get through this and emerge stronger on the other side.”

The vaccines plan has been proceeding faster than envisaged by the government’s economic advisers, the Office for Budget Responsibility, when it produced its last set of forecasts in November, according to a person familiar with the matter.

The OBR at the time projected an 11.3% hit to economic output in 2020 and said it would take until the end of 2022 for the economy to recover to its pre-virus peak. The person suggested its new set of forecasts on Wednesday will be better.

Full-year GDP figures for 2020, at a shade under a 10% drop, have already proved better than the OBR prediction.

The Financial Times first reported the improved outlook from the OBR, saying it will signal a faster pace of recovery than previously anticipated.

Sunak vowed that “honesty and fairness” will be at the heart of his budget. “My priority was, is and always will be jobs,” he said. “That’s the overriding thing that’s driving me every day, trying to protect as many people’s jobs as possible.”

( Updates with Sunak starting in fourth paragraph.)