Britain’s Chancellor Rishi Sunak said that the UK will soon see the “economic shock laid bare” and that the country cannot sustain record levels of public borrowing in its attempt to deal with the consequences of CCP virus pandemic.
Economic statistics to be published this week will mean “people will see the scale of the economic shock laid bare,” Sunak told The Sunday Times.
“Right now, the focus should be on supporting the economy, protecting as many jobs as possible, and providing the money required to combat the coronavirus,” he said.
The Treasury said on Saturday that Sunak will announce a one-year package worth more than 3 billion pounds ($3.98 billion) to help the state-run National Health Service (NHS) tackle backlogs in the health service, with thousands of treatments and operations delayed because of pandemic-related regulations on hospitals.
The COVID-19 pandemic, which was caused by the CCP (Chinese Communist Party) virus, has already had a substantial impact on public sector borrowing, the Office for National Statistics (ONS) said in its latest report.
The extra funding required to support government CCP virus support schemes, such as the furlough scheme, combined with reduced tax revenues and a fall in gross domestic product (GDP) have all helped push public sector net debt to a new high.
The British government borrowed 215 billion euros ($285 billion) in the first seven months of the fiscal year, the highest since records began in 1993, the ONS revealed on Friday.
Economists think Britain will borrow about 400 billion pounds (over $531 billion) this year, approaching 20 percent of GDP, the most since World War II.
It would be nearly double the hit from the global financial crisis, which took a decade to work down, and some lawmakers in Prime Minister Boris Johnson’s Conservative Party want more fiscal restraint now.
“Obviously, you can’t sustain borrowing at this level indefinitely,” Sunak said, adding that “by the spring” he must begin “returning to sustainable public finances.”
Speaking to the BBC’s Andrew Marr show on Sunday, he said, “We know that three quarters of a million people have tragically already lost their jobs, with forecasts of more to come. Borrowing is at record peacetime levels already.
“It is not just numbers on a chart, it is people’s lives and livelihoods, it’s their security being impacted. And it is something that we are going to grapple with for a while to come, sadly.”
Reuters contributed to this report.