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Spending Review: Unemployed predicted to rise to 2,6 million

The number of unemployed people in the UK is expected to surge to 2.6 million by mid 2021, Chancellor Rishi Sunak has warned.

In his Spending Review, he said the UK’s “economic emergency” had “only just begun”, with the government expected to borrow £394bn this year.

The latest figures show 1.62 million people are unemployed.

Mr Sunak said the government would spend £280bn this year “to get our country through coronavirus”.

He also announced that public sector pay would be frozen, except for the lowest paid, as well as nurses, doctors and other NHS staff who will get a pay rise.

And the chancellor said spending on overseas aid, as a proportion of national income, would be 0.5% in 2021-2 – down from the 0.7% currently set in law.

Speaking in the House of Commons, the chancellor said the economy was predicted to contract by 11.3% – “the largest fall in output for more than 300 years” – and grow by 5.5% next year and 6.6% in 2022.

He added: “Even with growth returning, our economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. And the economic damage is likely to be lasting.”


The government’s Covid response, including furlough, has led to huge spending rises, at a time when its income from taxation is down.

Mr Sunak said the UK was expected to borrow £394bn this year – the “highest recorded…in our peacetime history”.

He predicted this would fall to £164bn next year and £105bn in 2022-3.

Some Spending Review announcements were trailed before his statement, including:

Mr Sunak told MPs: “The spending announced today is secondary to the courage, wisdom, kindness and creativity it unleashes.

“These are the incalculable but essential parts of our future, and they cannot be mandated or distributed by government. These things must come from each of us, and be shared freely, because the future, this better country, is a common endeavour.”

The chancellor had intended – as usual – to set out plans for the next three years, but this was reduced to just one year due to the economic turmoil caused by the pandemic. –