Sunak's Spending Review 'sobering' as Covid-19 leaves 'scars' on UK economy

Tax rises 'further down the line'

Chancellor Rishi Sunak delivered a "sobering picture" of the UK economy in his one-year Spending Review, with Covid-19 leaving "long lasting" scars, according to industry commentators, who predict that this further round of spending will need to be paid for through higher taxation.

"The Chancellor spelt out quite clearly the extreme damage that has been done to the economy; the numbers are frightening," said Neil Birrell, CIO at Premier Miton Investors. Sunak confirmed to the House of Commons earlier today (25 November) that the Office for Budget Responsibility (OBR) has forecast the economy will contract by 11.3% this year - the biggest decline in 300 years - rising to 5.5% next year. "After the forecast bounce next year and in 2022, growth will fall back again just over 2%, then back below 2% for the next two years," Birrell said. "This illustrates that the...