Britain to face 5 percent annual deficit by next election

World Grigory Matyunin 28-May-2020
British Prime Minister Boris Johnson. ID 157835672 © Vladyslav Musiienko | Dreamstime.com

Britain is likely to have a five percent annual deficit of national income by 2024, the year of the next election due to the lasting effects of the coronavirus pandemic according to estimates made by independent economists.

Previous predictions made by the Bank of England as well as the Office for Budget Responsibility foresaw a prompt recovery. Yet a new survey of independent economists has indicated that the damage is likely to be long-lasting. Previous predictions have been criticised as unreasonably optimistic.

With the chancellor Rishi Sunak under pressure to avoid raising taxes or cutting public spending, questions are arising over how the emergency measures will be financed.

The amount of public debt as a portion of the national income will continue to increase and is already on course to hit 100 percent. The debt to national income ration is the highest it has been in nearly 60 years.

Mr Sunak has indicated that some tax rises may be necessary. While introducing a support package for the self-employed he indicated that advantages they currently enjoy in the tax system might cease soon. “If we all want to benefit equally from state support, we must all pay in equally in future,” he said.