Economic Emergency Has Just Begun - Chancellor

Chancellor Rishi Sunak made it clear on a recent speech to parliament: "the economic emergency caused by Covid-19 has only just begun." The warning is grim. The pandemic will leave lasting damages to businesses, jobs, and growth.

The forecast now places the recession as the biggest economic decline in 300 years. It will take two years more before the economy can go back to its pre-pandemic rates. This year alone, the UK economy is expected to shrink by 11.3 per cent.

With the economy's situation, government borrowing is expected to max out, the highest non-wartime deal. The Office for Budget Responsibility has already released what they expect to be the number of unemployed people by next year. The surge is predicted to be 2.6 million by the end of 2021.

That spells out an unemployment rate of 7.5 per cent, not since the 2009 financial crisis has we experienced such a high percentage rate. But the government remains hopeful, pointing out the fewer jobs are expected to be lost than what was originally predicted last summer.

In the chancellor's Spending Review, it spelt out how much the government would spend on public services.

Mr Shunak adds, "That's why we have taken, and continue to take, extraordinary measures to protect people's jobs and incomes."

The government has subsidised the wages of employees who remain unable to work due to the pandemic. The scheme that should have ended this year will extend to March 2021. The government hopes that this will keep at least 300,000 people out of work.

Funding For Housebuilders

The chancellor has also pledged to provide £2.2bn of funding for housebuilders. Still, a part of his Spending Review, the majority of the funding will be in the form of loan finance for home builders.

Another £12.2bn will go towards the Affordable Homes Programme. This is a grant that provides support for developing affordable housing.

Former RICS residential chairman, Jeremy Leaf, said: "Hopefully, the funds will be used to improve the pace of supply of affordable new housing for sale and to rent in places of most need.

"Further support for first-time buyers when the stamp duty concession ends and Help to Buy Part 2 begins in the spring, are other areas which could help keep transaction numbers up.

"Their value to the wider economic recovery, particularly employment, has proved so crucial in recent months.

"Stimulation of infrastructure expenditure would be most welcome too as these projects are often the cause of delays in the delivery of housing."