UK Treasury chief hails economic rebound from pandemic

LONDON (AP) — Britain's Treasury chief Rishi Sunak is painting a relatively rosy picture of the state of the British economy following the country's deepest recession in around 300 years as a result of the coronavirus pandemic.

In his annual budget speech to Parliament, Sunak said Wednesday that independent forecasters at the Office for Budget Responsibility are predicting growth this year to be 6.5%, up from the previous prediction of 4% just a few months ago. He also said that borrowing and debt will be lower as a proportion of national income than previously thought.

The British economy, which suffered the worst recession among the Group of Seven industrial nations last year, has been recovering over recent months following the lifting of lockdown restrictions as well as a pick-up in global trade.

However, it has suffered a series of shortages that many blame on Britain's departure from the European Union and dislocations caused by the pandemic. It is also experiencing big price rises, largely due to the sharp pick-up in energy costs.

Because of the improving economic backdrop, Sunak said he would help families meet the rising cost of living and that every government department will receive a “real-terms rise in overall spending” over the coming three years. He also said a controversial cut in the government's spending on overseas aid to 0.5% of national income will, according to the forecasts, revert back to the previous level of 0.7% by 2024/25.

“Today’s budget does not draw a line under COVID. We have challenging months ahead,” he said. “But today’s budget does begin the work of preparing for a new economy post-COVID.”

Earlier, Sunak emerged from his office at 11 Downing Street with his team, holding up the red budget box that contains the speech that he will...