Chancellor lays bare staggering cost of Covid response

Grant Prior 2 months ago
Share

Chancellor Rishi Sunak spelt out the economic cost of the government’s Covid-19 response in a sobering Spending Review on Wednesday.

Total spending on tackling Covid-19 has already hit £280bn with another £55bn to come next year.

The underlying national debt will be 105% of GDP this year before falling annually to 90.5% of GDP by 2025-26.

Latest Office for Budget Responsibility (OBR) forecasts predict an 11% contraction in the UK economy this year – the largest fall in output for more than 300 years.

The OBR said: “Our central forecast shows £20-30bn in spending cuts or tax rises would be required to balance revenues and day-to-day spending and stop debt from rising by the end of this Parliament.”

Sunak said: “Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022.”

Unemployment is predicted to rise to a peak of 7.5% – 2.6m people – in the second quarter of next year before forecast falls in every year, reaching 4.4% by the end of 2024.

Latest news

Tube chiefs tell contractors trains are safe for builders

Contractors encouraged to stagger site start times in London
8 hours ago

Construction recovers to pre-pandemic level

New work output grew 3.5% in November lifting output above February 2020 pre-shutdown level
8 hours ago

Colas rolls out weekly Covid rapid testing for staff

Build UK trade body offers member firms lateral flow kits at a discount
9 hours ago

Self-employed wages up 9% in north west

Average freelance trade wages running nearly 10% below pre-pandemic level
5 hours ago

Cemex invests in “kit of parts” offsite housing firm

Materials giant backs Modulous to "revolutionise" housing industry
8 hours ago

House building bounce back hailed by minister

Latest official statistics show completions tripled in the third quarter of 2019
1 day ago

Government clears 514-home London Master Brewer scheme

Housing secretary decides not to call in Hillingdon Gardens scheme
8 hours ago

Aarsleff shifts to expansion after return to profit

Ground engineering contractor optimistic with 12 months of good work visibilty
8 hours ago

Fresh shock structural steel price hike

Price of structural steel jumps nearly 50% in just over six months
1 day ago

Former Carillion bosses face new legal action

Eight ex-directors could be banned from boardroom for up to 15 years
1 day ago

Firms due £50m Covid dividend in R&D tax rebates

Contractors eligible to make tax credit claims for efforts to make sites Covid safe
1 day ago

Colmore Tang joins race to reclad unsafe towers by 2021

Midlands builder sets up cladding remediation arm as pace quickens to retrofit 2,000 unsafe buildings
1 day ago

Winvic starts £93m Edgbaston Stadium build to rent job

Civils arm will also deliver highways improvements for Warwickshire County Cricket Club
2 days ago

GLP starts work on 1m sq ft of warehouse space

Contractors given green light on latest round of development as demand soars for logistics schemes
2 days ago

Marshalls to build block plant as orders rebound

New concrete block factory will be built at St Ives in Cambridgeshire
2 days ago

Revenue offers contractors advice as IR35 changes loom

Free online workshops as controversial changes start in April: Sign up for places
2 days ago

Mace achieves net zero carbon goal

Carbon offset and 50% carbon emission cut achieves net zero target
2 days ago

Keltbray hires Multiplex project commercial director

Jason Gibbons joins as commercial director for built environment division
2 days ago

Winners revealed on £80m demolition framework

Sixteen secure places from 17 tenders received
2 days ago

BAM to trial innovative 5G use in construction

5G-powered cameras, drones and sensors to monitor Scottish construction sites
2 days ago

Breedon lures Amey boss to grow contracting arm

Highways specialist James Haluch to join GB Contracting in March
3 days ago

New pothole machine delivers road repairs four times faster

JCB Pothole Pro machine can repair a pothole in under eight minutes and at half the cost of a road gang
4 days ago

“Vital construction continues” during latest lockdown

New Business Secretary Kwasi Kwarteng praises industry's "major contribution"
3 days ago

Ductwork contractors hit by soaring steel prices

Firms warn steel shortages could hit jobs if situation worsens
3 days ago

Fears grow over Covid contract disputes as attitudes harden

Construction leaders warn of perfect storm from Brexit, falling activity, reverse charge VAT and surge in claims
4 days ago

Plans in for £60m Stockport’s Weir Mill flats

Capital & Centric advances scheme as a blueprint for inner city regeneration
3 days ago

£75m infrastructure funding deal for £1bn Purfleet town scheme

Main infrastructure works will start next month
3 days ago

WYG name disappears after US consultant takeover

Tetra Tech name adopted 18 months after WYG sale
3 days ago

Dive under team to slide in 11,000 tonne tunnel

Construction first for Morgan Sindall on East Coast Main Line
3 days ago

Electrical boss barred over £1m mystery expenses

Seven-year ban from running a business for Surrey electrician
4 days ago

Contractor services