RISHI: I WILL DO WHAT IT TAKES TO BEAT CRISIS
Chancellor vows to put ‘foot on accelerator’ to ease pain of recession
RISHI Sunak is vowing to “put the foot on the accelerator” to drive recovery after the UK plunged into the deepest recession on record.
The Chancellor says the Government is “grappling with something never seen before” following the pandemic triggered downturn.
But he insists the
people’s “resolve and creativity” will see us overcome the crisis. Figures yesterday showed the UK’s economic output – GDP – shrank by more than a fifth in the three months to the end of June when Covid-19 restrictions took hold.
The 20.4 per cent contraction, the biggest drop recorded in history, reduced the economy to its smallest size since 2003 with huge falls in construction, manufacturing and services.
The economy shrank over two successive quarters, confirming the first recession since the aftermath of the financial crisis more than a decade ago.
But the figures also brought a glimmer of positive news with an 8.7 per cent rise in GDP in June, suggesting business is surging back as lockdown restrictions ease.
In an article for the Daily Express today, Mr Sunak highlights his Budget initiatives to encourage recovery, including his Kickstart Scheme to fund work placements for under 25s and his Eat Out to Help Out discount in pubs and restaurants.
He says: “What we’re grappling
‘We have been able to reopen in a safe way... people will see that it’s a new normal, a safe normal’
with is something never seen before, which is why from the start of this crisis I’ve been prepared to put aside ideology and do what was right and fair in order to protect people’s jobs, their incomes and businesses.
“I know that with the resolve and creativity of the British people we will get through this together.”
In a bid to protect livelihoods the Chancellor says: “We are going to put the foot on the accelerator on the agenda we set out in March and make sure everyone has the same opportunity to get on in life.
Mr Sunak acknowledged yesterday that the country faced a massive wave of job cuts and difficult choices, but said: “We will get through this and I can assure people that nobody will be left without hope or opportunity.” He told Sky News it was not a “sustainable situation” to have swathes of the economy essentially shut down “and that’s why we have been able to successfully reopen bits, and do it in a safe way”.
He added: “And as people get back to going shopping, or going out for a meal, or indeed getting back to their office, they will see that it’s a new normal, it’s a safe normal.”
Britain’s economic slowdown was in line with Bank of England predictions and the news did not rattle the City.
The FTSE 100 share index closed in positive territory last night after traders welcomed a better-than-expected US jobs report.
But the figures suggested the UK’s downturn could be one of the worst among the world’s leading economies.
They show that only Spain, with a 22.1 per cent fall in GDP, fared more badly.
Jonathan Athow, of the Office of National Statistics, said: “The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record.
“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover.
“Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.” Suren Thiru, head
of economics at the British Chambers of Commerce, said: “With restrictions steadily easing, the second quarter is likely to prove to be the low point for the UK economy. However, the prospect of a swift ‘V-shaped’ recovery remains remote.”
He called for “bold action” to inject confidence, adding: “This should include supporting businesses to retain staff through a cut in employer National Insurance contributions and support to help businesses under local lockdowns.”
Shadow chancellor Anneliese Dodds said: “We’ve already got the worst excess death rate in Europe. Now we’re on course for the worst recession too.
“That’s a tragedy for the British people and it’s happened on Boris Johnson’s watch.
“A downturn was inevitable after lockdown but Johnson’s jobs crisis wasn’t. Now he must take responsibility, scrap the one-sizefits-all withdrawal of wage support and bring the health crisis properly under control.”