Britain’s public finances will face “enormous strains” in the wake of the third national lockdown, the Chancellor has warned.
Ahead of Wednesday’s Budget announcement, Chancellor Rishi Sunak told the Financial Times a bill for the Government’s £280billion investment in coronavirus support will eventually have to be paid, with low interest rates leaving the nation’s finances “exposed”.
Mr Sunak said: “We now have far more debt than we used to and because interest rates … at least a month or two ago were exceptionally low, that means we remain exposed to changes in those rates.
“That’s why I talk about levelling with people about the public finances [challenges] and our plans to address them.”
While Mr Sunak did not reveal any details on specific tax measures, the Budget is expected to include a swathe of actions aimed at kickstarting the nation’s economy as lockdown eases over the coming months.
These include a £126million boost for traineeships and a mortgage guarantee scheme aimed at helping aspiring homeowners with small deposits onto the property ladder.
Mr Sunak added that while there is a challenge facing the nation’s economy, he believes the Budget will be a much-needed boon for those hit hardest by the pandemic.
He said: “I stood up at the beginning of this [coronavirus] thing and said I will do whatever it takes to protect the British people through this crisis and I remain committed to that.
“We went big, we went early, but there is more to come and there will be more to come in the Budget. But there is a challenge [in the public finances] and I want to level with people about the challenge.
“Some 750,000 people have lost their jobs and I want to make sure we provide those people with hope and opportunity. Next week’s Budget will do that.”