Rishi Sunak: ‘Hardship lies ahead’ for the UK economy
Chancellor Rishi Sunak has said that “hardship lies ahead” for the UK economy despite the Bank of England improving its forecast for this year.
Yesterday the Bank upgraded its projection for the path of GDP in 2020, saying it would now contract 9.5 per cent rather than the 14 per cent it had previously pencilled in.
But the Bank’s monetary policy committee said that the economy would now take longer to recover as health concerns and weak business investment hold back growth.
Sunak today told the BBC it was “an improvement from when they last did their forecast”. But he added that the Bank is “right to say that hardship lies ahead”.
The central bank’s economic report said the economy bounced back quicker than expected in May, June and July after April’s historic collapse.
Yet it said the recovery would slow considerably. Unemployment would jump to 7.5 per cent, putting 2.5m out of work as the government’s furlough scheme is wound down, it said.
Bank of England governor Andrew Bailey said this was a “very bad story” for the UK economy.
On a broadcast round, Sunak said the worrying economic forecasts keep him awake at night. And he said that the next few months are going to be a difficult time for the country.
The 40-year-old chancellor, who only took up his post in February, said recently launched government support schemes were showing positive signs.
He told the BBC that the “reaction seems to have been very positive” to the eat out to help out scheme, which offers 50 per cent off in restaurants from Monday to Wednesday.
Sunak said there are signs that more people are venturing out to spend their money. But he cautioned that these are “very early days”.