Chancellor Rishi Sunak’s budget will be one of the most closely followed for years, as the government settles for the huge economic costs of the Covid-19 pandemic, and when he maps an economic path to the country.
In his statement from March 3, the Chancellor will outline the state of the British economy and its prospects for the future – and provide details of the government’s plans to raise or lower taxes.
So how does the UK economy fare under the two effects of coronavirus and Brexit? In the following diagrams, we take a look at the country’s economic health – and highlight some of the economic challenges facing the Chancellor.
Britain’s government debt has reached its highest level since 1963 – reflecting the huge cost of pandemic support measures such as the furlough scheme. National debt here means the total amount that the state owes its lenders – it is the accumulation of borrowing for many years.
So far this year, the annual amount of government borrowing – the amount that the government borrows to compensate for g between what it spends and what it raises in taxes – has reached £ 270.6 billion, which is 222 billion . according to the Office for National Statistics (ONS).
The Independent Office for Budget Responsibility (OBR) estimates that this figure could reach £ 393.5 billion. At the end of the financial year in March. This would be the highest amount in any year since World War II.
But it is also worth pointing out that this figure has been above 100% of gross domestic product (GDP) or annual national income for 131 of the last 320 years.
The 21st century has so far been one of rising levels of public sector net borrowing (how much both state and local governments have borrowed to implement their spending programs). Last month’s figures were £ 8.8bn, the highest loan amount in January since monthly records began in 1993.
As a result of the pandemic, net debt in the public sector has increased by £ 316.4 billion. During the 10 months since last ril to a full time of £ 2.1 trillion.
According to the Office for National Statistics (ONS), unemployment is currently 5.1%. This is the highest figure in five years and shows the effects of lockdowns on the economy due to the pandemic in which many jobs are forced to close their doors.
So far, this has not resulted in an increase in unemployment, as the full support scheme has helped protect jobs, but this may change if the scheme ends as planned in ril. Most economists expect unemployment to continue rising in 2021.
However, the roll-out of Covid vaccines is rapid, and this could help keep unemployment down if it allows for a staged restart of the UK economy.
Young people are particularly affected by the breakdown of the labor market from coronavirus, with workers under the age of 24 accounting for almost half of the total decline in employment during the economic downturn, according to studies by the Institute for Employment Studies (IES).
At the same time, more people are looking for fewer jobs, so young people are struggling to enter the labor market.
It is significant that young people account for 46% of the total fall in employment during the pandemic – even though they account for only one in nine of the workforce.
Prime Minister Boris Johnson has hinted that continued support for workers will continue off the rails as he vowed not to “pull the rug out” under the UK economy as he unveiled plans to ease the national shutdown in four steps.
If the government does not extend job support schemes, the latest forecast from the Bank of England suggests that unemployment in the UK will reach 7.75% over the summer.
Full-time employment has increased during the pandemic despite Covid’s impact on the labor market. However, the number of those in part-time jobs or self-employed has fallen as freelancers and those in precarious work bear the crisis.
Campaign groups are urging the Chancellor to join GS in schemes such as the Self-Employed Income Support Scheme (SEISS) to support millions of self-employed and other workers excluded from furlough. The Resolution Foundation think tank says 2.3 million workers miss out on help because they are not covered by SEISS.
UK house prices rose 8.5% last year – the highest annual growth rate since October 2014 – with the average UK house price reaching a record high of £ 252,000 in December 2020.
Northwest had the highest growth of 11.2%, while London rose only 3.5%.
One of the factors behind the increase has been the stamp duty holiday in England, which was introduced in July last year. However, if the tax deduction ends on March 31 as planned, sales and house price increases are likely to slow down afterwards.