Illustrations by Hannah Robinson
The UK economy is currently facing several severe challenges. Pre- COVID-19, the Chancellor of the Exchequer Rishi Sunak announced that public spending would have to increase in order to support the economy post-Brexit.
But now, the current lockdown (that was a necessary step in curbing the spread of COVID-19) has been a further blow to the UK economy. The Bank of England had to cut interest rates to an all-time low of 0.25%, to foster economic growth and recovery. Sunak has also introduced unprecedented levels of public spending in order to try and support people and the economy, especially in terms of consumption growth and promoting employment.
Despite the efforts to sustain economic development, Sunak’s commitments to public spending will see a rise in the budget deficit.
According to recent estimates, budget deficit might increase to 2.4% of GDP in 2021 and 2.8% in 2022 (in March 2019 it was equivalent to 1.2%) , increasing of 47.6 billion pounds this year.
Further, the Office for Budget Responsibility claimed that the UK economy could shrink by 35% with 2 million jobs losses due to lockdown measures. This will make recovering from a large deficit particularly challenging. And if lockdown continues for another three months, it is estimated that the budget deficit will be £273bn by the end of the year.
There is no doubt that the ideas behind Brexit, totally contradict the necessary response to the pandemic. This pandemic requires global unity and the initial decision by Johnson to opt for a different strategy (e.g. herd immunity), appeared to be a continuation of his Brexit strategy of rejecting international cooperation and global best practice strategizing.
The combination of Brexit and the pandemic has put Johnson’s political stability in jeopardy. On the one hand, Brexit and the rejection of international cooperation and globalisation was one of the main pillars of the Tories’ recent political campaigns. On the other hand, the initial underestimation and slow response to the pandemic could lose Johnson some voters. However, it seems that if the election was held today, 52% of voters would confirm their trust in Boris Johnson based on his recent approval rating.
At any rate, Brexit negotiations have been forced to stop due to further clashes between London and Brussels, and as with almost all aspects of our lives, the outbreak has complicated discussions.
“The UK cannot refuse to extend the transition” said Michel Barnier. But Boris Johnson claims that he won’t ask for a new delay, even though 64% of people in the UK would like one. And 44% of Tories think that the UK has to postpone Brexit until the outbreak has been tackled.
In his time as Prime Minister so far, and indeed throughout his political career, Johnson has shown that his political direction can change at any time. Some might argue that this is the best way to handle his broken party. Yet when it comes to coping with the virus, this will have to stop; the UK now has the highest COVID-19 death toll in Europe, and the British people need clear and decisive leadership. This is not the time to insist on several fronts.