The measures in the Budget, alongside previous support – including next year’s significant £100 billion capital programme – provide a significant boost to the economy this year and into the next, while continuing to support people, businesses and public services. The OBR expects the economy to recover quickly when restrictions are lifted. The Office for Budget Responsibility (OBR) now expect the peak in unemployment to be 340,000 lower than that assumed in their November 2020 forecast. The measures in the Budget, particularly the CJRS extension, provide further support to the labour market and the wider economy. Without this support, the economic effects of the COVID-19 pandemic would have been considerably worse. Taking into account the measures announced at Budget 2020, which included significant capital investment, total support for the economy amounts to £407 billion this year and next – the largest peacetime support package for the economy on record. The significant support for individuals, businesses and public services set out at Spending Review 2020 ( SR20) and the Budget totals £352 billion across this year and next year. The government’s package of economic support has been unlike anything in the UK’s peacetime history. Redundancies subsequently rose to a record high and vacancies remain low. In Spring 2020, many firms stopped hiring and the number of advertised vacancies fell sharply. ĬOVID-19 has disrupted livelihoods and prevented many people from working. GDP for 2020 as a whole fell by 9.9%, the largest annual fall in 300 years. Increased cases into the Autumn required renewed restrictions, which led to a slowing of activity and a further fall in November. Gross Domestic Product ( GDP) contracted by 24% between February and April 2020, with economic output then rising as restrictions were lifted. As the pandemic hit, the UK entered its first recession in 11 years. 1.1 Economic and fiscal contextĬOVID-19 has had a profound effect on the UK economy. This action will be underpinned by principles of fairness and sustainability as the government continues to invest in excellent public services and infrastructure to create future growth.īy taking action to protect the economy, support the recovery and repair the public finances, the government is taking the most sustainable route to continuing to deliver first-class frontline public services, funding investment to level up across the whole of the UK, and creating an outward-looking, low-carbon, high-tech economy. The Budget sets out clearly the size of the challenge and steps to deliver more sustainable public finances, providing certainty and stability to people and businesses and supporting a strong recovery. Once economic recovery is durably underway, the public finances must be returned to a sustainable path, following a period of record peacetime borrowing. Support in the Budget reflects the easing of restrictions to enable the private sector to bounce back as quickly as possible.Īs the economy reopens, the Budget sets out the steps the government is taking to support the recovery, ensuring the economy can build back better, with radical new incentives for business investment and help for businesses to attract the capital, ideas and talent to grow. The Budget sets out how the government will extend its economic support to reflect the cautious easing of social distancing rules and the reopening of the economy in the government’s roadmap. Thanks to people’s hard work and sacrifice, supported by the success of the initial stages of the vaccine rollout, there is now a path to the reopening of the economy. In the face of this threat, the government acted swiftly to provide support to protect businesses, individuals and public services across the UK, adapting its economic response as the pandemic evolved. Like that of many other countries, the UK’s economy has been hit hard, with both the direct effects of the virus and the measures necessary to control it leading to an unprecedented fall in output and higher unemployment.
The Budget follows a year of extraordinary economic challenge as a result of the ongoing COVID-19 pandemic. Ordered by the House of Commons to be printed 3 March 2021.Presented to Parliament as a return to an order of the House of Commons.
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