Second wave fears: Rishi Sunak could delay autumn Budget
Finance minister Rishi Sunak is weighing options to shelve his autumn Budget if the UK suffers a big second wave of the coronavirus, it is reported.
While Sunak expects to deliver his Budget as planned, it is a sign of government anxiety over a possible autumn coronavirus spike that he is ready to delay big public spending decisions until after the crisis, the Financal Times said.
Britain risks a second wave of Covid-19 in the winter twice as large as the initial outbreak if it reopens schools full-time without improving its test-and-trace system, according to a study published last week.
The government wants all pupils to return to school by early September, with Prime Minister Boris Johnson calling this a national priority.
But the Budget could be postponed until spring 2021. If so, Sunak would be expected to produce a “mini-spending review” in the autumn, allocating spending to departments for just a single year, the FT said.
The Office for Budget Responsibility has estimated the government will borrow £372bn this year to pay for the shortfall between tax revenues and public spending.
But Sunak is reportedly uncertain autumn would be the best time to introduce spending cuts or tax rises if the UK is battling a second wave.
“While it’s very likely to happen, there is an element of uncertainty,” an ally of Sunak’s told the FT.
“If we have a series of local lockdowns and a second spike, it’s not clear that would be the right time for a Budget.”
Yesterday UK employment data showed 730,000 Brits have lost their jobs since the start of lockdown.
And today GDP data confirmed the UK is in its worst recession on record, after a record 20.4 per cent plunge in GDP over the second quarter.