Experts warn that the UK will have to deal with the most painful financial problems over the recent 300 years. The Kingdom has to survive the pandemic-driven crisis and a severe downturn in the global economy. Above all else, the divorce with the EU like the sword of Damocles is hanging over the national economy.
Amid such heavy headwinds, the British economy has been in dire straits. So, the government admits that it has to rule under "economic emergency". Chancellor of the Exchequer Rishi Sunak unveiled official forecasts of the UK GDP for 2020. The British economy is projected to shrink by 11.3% this year in annual terms. If grim predictions come true, the national economy will suffer the worst slump over 300 years. "Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022", Rishi Sunak commented on prospects of the UK economy. “And the economic damage is likely to be lasting. Long-term scarring means, in 2025, the economy will be around 3% smaller than expected in the March budget", he added. On the back of a protracted economic crisis, the government will have to expand borrowings to cope with increasing public spending. So, the public debt could swell to 97.5% of the UK GDP.
The finance ministry reckons that the government will have to allocate an extra $5.7 billion to prevent massive job losses. Besides, local authorities will be provided with $5.3 billion to fund their social projects.
