Sunak Urged to Unleash $140 Billion Fiscal Push to Aid Recovery
(Bloomberg) -- Chancellor of the Exchequer Rishi Sunak is being urged to deliver a 100 billion-pound ($140 billion) fiscal boost next week to help the U.K. recover from its deepest economic slump in three centuries.
In a report published ahead of his March 3 budget, the Resolution Foundation research group called on Britain’s finance minister to provide 70 billion pounds of targeted stimulus on top of extending existing pandemic support programs.
Combined, that would add the equivalent of 5% of GDP to the record borrowing that Sunak has amassed during the pandemic. It would also align the U.K. with the U.S., where President Joe Biden is seeking Congressional support for a $1.9 trillion stimulus package. Treasury Secretary Janet Yellen has told Group of Seven countries to “go big” too.
In a note Wednesday, Goldman Sachs said it expected Sunak to extend support and unveil a stimulus package of 60 billion pounds aimed at spurring job creation and business investment.
Sunak signaled this week that support programs including wage subsides for furloughed workers may not expire as planned in the coming weeks. They’d remain in place during Prime Minister Boris Johnson’s plan for a gradual exit from England’s third coronavirus lockdown.
While that pleased business lobbies that feared large-scale job cuts if aid was withdrawn, the Resolution Foundation said there has been little public debate about the need for further stimulus to boost the economy once restrictions are lifted. It said such measures could include:
- A 27 billion-pound retraining and job support package
- 18 billion pounds of investment in environmental initiatives
- A 9 billion-pound voucher program to boost high streets and local retailers
- Making permanent a 20 pounds-a-week uplift for welfare payments through Universal Credit
“That is the scale of ambition needed to increase the chances that Britain sees a strong recovery from its pandemic-induced slump, and to ensure the recovery reaches firms and families across the U.K.,” said James Smith, research director of the Resolution Foundation.
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