Long Road to Recovery for U.K. Public Finances, Survey Shows
Long Road to Recovery for U.K. Public Finances, Survey Shows
(Bloomberg) --
U.K. public finances will take years to recover from the massive spending spree designed to limit the damage inflicted by the coronavirus pandemic, according to a survey of economists released by the Treasury this month.
The annual budget deficit will likely be close to 100 billion pounds ($123 billion), or 4% of gross domestic product, by 2025, the survey of private economists showed. The forecast is more pessimistic than the U.K.’s own fiscal watchdog, the Office for Budget Responsibility, which sees the shortfall reaching 59 billion pounds by 2024-25.
Borrowing is forecast to be about 270 billion pounds this year, up from a little over 60 billion pounds before the crisis, the survey showed.
Rishi Sunak, the U.K. finance minister, is already looking at ways to gradually withdraw the Treasury’s support package. A government official said Tuesday that Sunak is set to close the government’s coronavirus wage support program to new entrants. The furlough program pays workers 80% of their normal wages, up to 2,500 pounds ($3,080) a month.
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