London Daily

Focus on the big picture.
Monday, Jun 22, 2026

Rishi Sunak warns UK economy will get worse before it gets better

Rishi Sunak warns UK economy will get worse before it gets better

Tougher Covid rules will have impact before vaccine improves outlook, says chancellor

Rishi Sunak has warned Britain’s economic performance will worsen before the coronavirus vaccine helps to improve the outlook for jobs and growth.

The chancellor told the House of Commons that, while the vaccine provides hope, there was a need for tougher national restrictions to contain the spread of the virus and that this would have a “further significant economic impact”.

“While the vaccine provides hope, the economy is going to get worse before it gets better,” he said.



Speaking in the Commons for the first time since the government launched a third national lockdown, Sunak said the Treasury’s emergency support measures were helping to protect jobs and businesses and that the vaccine was the “most important economic lever” to reboot the economy.

But despite calls from business leaders, trade unions and Labour for a fresh package to match the challenges posed by the latest restrictions, the chancellor only restated the support now available under previously announced schemes.

Sunak said he was confident that “this comprehensive support” – which totals more than £280bn in higher spending and tax cuts since the pandemic began – would help Britain through until the spring.

Indicating that any major changes would be left until the budget on 3 March, the chancellor said there were signs of “underlying resilience” in the British economy, including a rise in household savings to record levels, evidence of firms improving their cash buffers, and the new trading partnership with the EU removing Brexit uncertainty.

It comes after Sunak announced £4.6bn in new grants for firms in the hardest-hit sectors of the economy last week. The furlough scheme – which has been used to subsidise the wages of more than 9m jobs at more than 1m companies since its launch, at a cost of more than £46bn so far, has also been extended until the end of April.

However, the chancellor dropped a heavy hint that he would soon scale back high levels of government spending to tackle record government borrowing, saying the public finances were “badly damaged and will need repair”.

In an update devoid of new announcements, he said: “The road ahead will be tough. Now is the time for responsible management of our economy, taking the difficult but right long-term decisions for our country.”

Anneliese Dodds, the shadow chancellor, criticised Sunak for not announcing fresh measures. “Today the chancellor appears out of ideas, urging us to look to the sunny uplands but providing nothing new. The purpose of an update is to provide us with new information, not to repeat what we already know.”

Newsletter

Related Articles

0:00
0:00
Close
UK Expands Alcohol Ban Enforcement Using Tagging Technology Ahead of World Cup
UK Invests £50 Million in Critical Minerals Supply Chain Security
UK Appoints Special Envoy on Preventing Sexual Violence in Conflict
UK Introduces Fines for Landlords of Unsafe Rental Properties
Reform UK Leads Opinion Polls as Immigration Debate Reshapes UK Politics
Police Investigate Edinburgh Attacks as Potential Hate Crimes
King Charles to Publish Personal Tax and Royal Household Financial Records
Nottingham University Hospitals Maternity Inquiry Report Set for Publication
Heat-Health Alerts Issued Across London and Southern England Amid Rising Temperatures
UK Economy Shows Pressure From Middle East Conflict Despite Modest Growth
Brexit Anniversary Reignites Debate Over UK Economic and Political Direction
UK Parliament Continues Legislative Work Amid Leadership Transition
Financial Markets Hold Steady After UK Leadership Shake-Up
Andy Burnham Enters Labour Leadership Race With Strong Parliamentary Backing
Keir Starmer Resigns as UK Prime Minister After Two Years in Office
Reform UK MP Lee Anderson to Raise Pension Concerns Over British Coal Staff Superannuation Scheme
UK Parliament to Debate Newborn Screening for Spinal Muscular Atrophy Following Public Petition
Met Office Warns of Water Safety Risks During Heatwave as Temperatures Peak in England
Treasury Increases Mileage Allowance Payments for 2026–27 Tax Year to 55 Pence Per Mile
UK Government Raises Electricity Generator Levy to 55 Percent in New Revenue Measure
House of Lords Moves Financial Services and Markets Bill to Committee Stage Amid Regulatory Scrutiny
Westminster Hall to Debate Petition on Pro-Israel Influence in UK Politics
UK Parliament Prepares for Estimates Days Debates as Backbench Business Schedule Approved
Armed Forces Bill Nears Final Stages in UK House of Commons With Military Justice Reforms
Donald Trump Comments on UK Political Situation, Citing Immigration and Energy Policy Concerns
Andy Burnham By-Election Victory Fuels Speculation Over Potential Labour Leadership Contest
UK Economy Shows Resilience but Faces Headwinds from Middle East Tensions, UK Finance Says
UK Parliament Opens Week of Debates on Net Zero, Security and Armed Forces Reform
Met Office Issues Amber Extreme Heat Warning as Temperatures Expected to Reach 35C Across England and Wales
Prime Minister Keir Starmer Faces Mounting Leadership Pressure After Makerfield By-Election Defeat
London Hotel Wins World’s Best Afternoon Tea Award at International Hospitality Guide La Liste
Court of Appeal Rules in Favour of Competition and Markets Authority in Phenytoin Drug Case
Chichester Waste Site Suspended After Environment Agency Finds Serious Fire and Pollution Risks
UK Appoints Chris Elmore as Special Envoy on Preventing Sexual Violence in Conflict
Environment Agency Fines Yorkshire Firms Nearly £470,000 for Environmental Permit Breaches
British Chambers of Commerce Says Post-Brexit Trade Deals Have Limited Economic Impact
Resident Doctors to Vote on Government Pay Offer in Ongoing NHS Dispute
UK Public Borrowing Reaches £46.3 Billion in Early Fiscal Year, Driven by Debt Interest Costs
UK Government Unveils £100 Million Package to Strengthen Fire and Rescue Response Capacity
Bank of England Holds Interest Rates at 3.75 Percent Despite Easing Inflation
Met Office Extends Amber Heat Warning as Temperatures Forecast to Reach 38C Across Southern England
Prime Minister Keir Starmer Expected to Resign Amid Mounting Labour Party Pressure
UK Government Tightens Procurement Rules to Prioritise National Security and Supply Chain Resilience
National Drought Group Reviews Water Supply Risks After Dry Spring and Ongoing Heatwave
Andy Burnham Faces Leadership Speculation After Weak Local Election Results for Labour
Charity Commission Appoints Interim Managers to Barnabas Aid Amid Financial Investigation
Government Awards £27 Million Leonardo UK Contract to Maintain Military Aircraft Fleet
Environment Agency Suspends Chichester Waste Site Permit Over Fire and Pollution Risks
Border Force Seizes Record Cannabis Shipment in Major UK Criminal Network Disruption
Lloyds Banking Group to Hire 300 Artificial Intelligence Specialists in Digital Expansion Push
×