London Daily

Focus on the big picture.
Monday, Jun 01, 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
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
Global Critical Mineral Alliances Expand as Western Nations Move to Counter Chinese Supply Dominance
United States Imposes Fifty Percent Tariffs on Mexican Steel and Aluminum Ahead of Trade Pact Review
European Union and China Head Toward Major Trade Conflict Over Clean Technology Exports
United States Economic Growth Severely Downgraded to One Point Six Percent as Stagflation Fears Mount
World Health Organization Warns Central African Ebola Epidemic is Outpacing Containment Efforts
United States Treasury Department Conditions Sanctions Relief on Reopening of the Strait of Hormuz
Iranian Air Defenses Intercept and Destroy United States Military Drone Over Bushehr Province
Iranian Armed Forces Launch Ballistic Missiles Toward Unspecified Targets Prompting Regional Condemnation
United Nations Secretary-General Warns Global Order Facing Highest Level of Conflict Since 1945
Israel Issues Sweeping Evacuation Orders in Southern Lebanon Amid Intensified Hezbollah Conflict
Russia Announces Systemic Military Strikes Targeting Ukrainian Defense and Energy Infrastructure
United States and Iranian Negotiators Reach Draft Agreement to Extend Ceasefire and Resume Nuclear Talks
United Nations Security Council Deeply Divided Over United States Capture of Venezuelan President
US and Iran Exchange Direct Military Strikes Amid Fragile Gulf Ceasefire
World Health Organization Warns of Catastrophic Ebola Outbreak in DR Congo
Russia Threatens New Wave of Strikes on Ukrainian Infrastructure and Embassies
Scientists Warn Atlantic Ocean Currents Could Collapse Faster Than Projected
Anthropic Reaches $900 Billion Valuation in Historic AI Funding Round
Washington Imposes Crippling Sanctions on Iranian Maritime Authority
Japan and the Philippines Initiate Strategic Intelligence-Sharing Pact
Microsoft Deploys Autonomous Computer-Using AI Agents to Global Markets
Anthropic Secures $45 Billion Compute Infrastructure Agreement With SpaceX
U.S. Director of National Intelligence Resigns Amid Administration Shakeup
Micron Technology Crosses Trillion-Dollar Valuation Amid Unprecedented Hardware Demand
Canada and Germany Finalize Historic Long-Term LNG Export Agreement
China Expands International Travel Restrictions on Domestic AI Researchers
Japan Approves Sweeping Overhaul of National Intelligence Apparatus
Global Airlines Scramble Logistics as Middle East Airspace Remains Fractured
Japan's Naphtha Imports Plunge 47 Percent Amid Strait of Hormuz Closure
Global Crude Prices Retreat Below $96 as Gulf Tensions Momentarily Ease
Generative AI Outperforms Human Baselines in Landmark Global Creativity Study
NASA Partners With Private Aerospace to Unveil Permanent Lunar Base Architecture
South Korean Equity Markets Surge on Next-Generation Memory Chip Frenzy
×