London Daily

Focus on the big picture.
Monday, Oct 26, 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
KEY TRENDS TO WATCH
Declassified Intelligence Files Reveal British Security Services Monitored National Health Service Founder
British Government Launches Sweeping Regulatory Crackdown on High-Risk Cosmetic Procedures
Scottish National Party Demands Ban on Using Scottish Revenues to Fund English Nuclear Energy Projects
Mayor of London Initiates Landmark Pedestrianisation of Oxford Street to Revitalise Global Retail Hub
British Judges Granted Expanded Legal Powers to Punish Convicted Killers Who Refuse to Attend Sentencing
United Kingdom Poised to Miss Reduced International Aid Spending Targets Ahead of Fiscal Review
Surging Cocaine Consumption Drives Record Drug Fatalities and Rising Crime Rates Across Britain
Department of Health and Social Care Announces One Hundred and Forty Million Pound Boost for Urgent Care
British Services Sector Records Strongest Growth in Eight Months Despite Broader Economic Uncertainty
United Kingdom Retail Sales Suffer Unexpected Decline as Consumer Confidence Plummets
Greater Manchester Mayor Andy Burnham Urges National Debate on Restoring European Union Free Movement
Deep Cabinet Divisions Emerge Over Controversial Approval of North Sea Fossil Fuel Projects
United Kingdom Government Urges Citizens to Stockpile Essential Supplies in National Resilience Pivot
Storm Boelo Kills Two People and Cuts Power to Tens of Thousands Across Great Britain
Critical Software Flaw Forces Dozens of United Kingdom Government Services Offline Amid Mass Security Warnings
UK Consumer Confidence Tumbles Amid Rising Energy Costs and Global Commodity Price Pressures
North Sea Transition Authority Approves Production from Jackdaw Gas Field to Bolster Domestic Energy Security
Storm Boelo Leaves Tens of Thousands of Households Without Power Across Scotland and Northern Ireland
UK Government Launches National Be Ready Campaign Urging Households to Prepare Three Days of Emergency Supplies
Department for Environment Food and Rural Affairs Implements Stricter Water Quality Regulations for British Rivers
Welsh Government Launches Major Renewable Energy Initiative to Expand Offshore Wind Capacity Along the Coast
Northern Ireland Executive Reaches Final Agreement on Comprehensive Regional Infrastructure Modernization Plan
Office for National Statistics Reports Moderate Increase in British Retail Sales Driven by Autumn Discounts
Scottish First Minister Announces Emergency Housing Strategy to Tackle Severe Homelessness Across Urban Centers
Automotive Industry Leaders in the United Kingdom Urge Government Support for Electric Vehicle Manufacturing Transition
United Kingdom and European Union Initiate High-Level Negotiations on Post-Brexit Defense and Security Pact
National Health Service England Introduces Sweeping Digital Reforms to Reduce Hospital Waiting Lists Nationwide
Chancellor of the Exchequer Outlines Emergency Fiscal Measures to Address Local Government Funding Crises Across England
Bank of England Governor Warns of Persistent Inflation Pressures Impacting Interest Rate Decisions in the United Kingdom
UK Conservative Party Suspends Former Electoral Candidate Following Undercover Investigation
Actors and Writers Condemn British Anti Terror Legislation Targeting Activist Groups and Free Speech
Central Bank and Treasury Monitor Inflation Risks as International Monetary Fund Upgrades United Kingdom Growth Forecast
Storm Boelo Batters British Isles With Eighty Mile Per Hour Winds Causing Widespread Power Outages
British Intelligence Services and Technology Firms Partner to Counter Artificial Intelligence Enabled Cybersecurity Threats
UK Consumer Confidence Falls at Fastest Rate Since Brexit Vote as Cost of Living Intensifies
Chancellor John Healey Prepares Landmark Autumn Budget Focused on Devolution and Fiscal Rules
Northern Ireland Executive Ministers Reach Consensus on Shared Economic Development Priorities to Stimulate Regional Growth in Belfast
Department for Business and Trade Finalizes Conditional Support Package for Advanced Semiconductor Fabrication Facilities in Newport
Welsh Government Unveils Regional Industrial Development Strategy to Attract Green Energy Investment to South Wales Manufacturing Hubs
Foreign Secretary David Lammy Concludes Diplomatic Mission to European Capital Cities to Strengthen Post-Brexit Defense Cooperation
Department for Environment, Food and Rural Affairs Implements Stricter Regulatory Compliance Standards for Water Utilities Across England
Office for National Statistics Reports Moderate Wage Growth Stabilization and Resilient Employment Figures Across the United Kingdom
Scottish Government and Trade Union Representatives Reach Tentative Pay Agreement for Public Sector Transport Workers in Edinburgh
National Health Service England Announces Emergency Capital Funding Allocation to Reduce Winter Emergency Department Bottlenecks
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Inflation Pressures
British Prime Minister Keir Starmer and Treasury Officials Finalize Urgent Fiscal Adjustments Ahead of Upcoming National Budget
Tour de France Organizers Confirm Historic Grand Depart Featuring Edinburgh and Yorkshire Stages
National Cyber Security Centre Issues Urgent Alerts Following Global Security Vulnerability in Core Programming Software
Independent Energy Analysts Warn Great Britain Faces Highest Winter Power Tariffs in Europe
×