Sunak budget to look to the future
RISHI Sunak’s second Budget of the year will focus on “looking to the future and building a stronger economy for the British people”, the Chancellor said yesterday.
Mr Sunak’s previous budgets in March, 2021, and 2020 had been heavily focused on supporting the country through the coronavirus pandemic.
Now, however, the Chancellor is keen to focus on skills, innovation, and economic growth, as he said it was key that public finances were returned to a stable footing.
Speaking to Times Radio yesterday, Mr Sunak said that “[over] the last year, I’ve been focused on delivering our plan for jobs, protecting people’s livelihoods, their incomes, their jobs”.
He added that it was now time to shore up the economy to weather any future storms, telling the BBC’s The Andrew Marr Show: “That means strong investment in public services, driving economic growth by investing in infrastructure, innovation and skills, giving businesses confidence, and then supporting working families.
“Those are the ingredients of what makes a stronger Budget and that’s what we will deliver next week.”
However, the Chancellor faces a number of challenges, not least a warning from the Bank of England’s new chief economist that inflation could rise above 5%.
Mr Sunak said that would “certainly feed into my thinking about what the right approach to the country is”, but he indicated that the rise in inflation was down to factors out of his control.
He told The Andrew Marr Show: “If you take the last inflation number, which was just over 3%, which is obviously higher than we normally target, and you look at what’s causing that, the bulk of that increase is down to two things.
“One of those is the fact that, as economies have reopened rather rapidly after coronavirus, that has put pressure on global supply chains, and then the other part of the increase is very much just down to energy prices.
“Both of those factors are global factors,” Mr Sunak added.
“We’re not alone in experiencing those problems, I don’t have a magic wand that can make either of those things disappear.”
Mr Sunak added that “compared to most other countries – advanced economies – a much larger percentage of our outstanding debt is directly linked to inflation, which means it’s something that I have to keep probably a slightly closer eye on than others”.
Some £20 billion of spending has already been committed across 11 announcements from the Treasury over the weekend, including £7 billion for transport infrastructure outside of London.
Mr Sunak said £4.2 billion of the £7 billion spread over five years had already been allocated, but the pot had been topped up by an extra £1.5 billion.
During another media interview, the Chancellor told Sky News’ Trevor Phillips On Sunday: “It’s a great example of levelling up in practice, and it’s ultimately just going to create growth in all of those places.”