London Daily

Focus on the big picture.
Saturday, Sep 19, 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 Parliament Advances Sovereign Grant Reform Setting Royal Funding at £99.9 Million
King Charles Urges Human-Centred Approach to Artificial Intelligence at Scotland Summit
House of Lords Begins Scrutiny of Voting-Age and Political Finance Reforms
UK Labour Market Shows Growing Divide Between Younger and Older Workers
Nearly Seven in 10 UK Small Businesses Delay or Cancel Growth Plans as Costs Rise
Andy Burnham Reaffirms UK Net-Zero Target Amid North Sea Energy Debate
UK Parliament Demands Credible Financial and Decarbonisation Plan for British Steel
MPs Urge Government to Reject Thames Water Rescue Deal and Prepare Special Administration
Bank of England Holds Rate at 3.75% as Energy Shock Raises Inflation Risks
TUC Calls for Social Energy Tariff Funded by Higher Taxes on Bank Profits
UK Parliament Enters Conference Recess After Advancing Sovereign Grant Legislation
King Charles Hosts Artificial Intelligence Leaders at Dumfries House Summit
Nearly Seven in Ten UK Small Businesses Delay or Cancel Growth Plans as Costs Rise
Anthropic Details Malicious Use of Claude in Cyber, Weapons and Influence Operations
McLaren Announces £500 Million UK Investment and 1,000 New Jobs
Scotland and Wales Sign Cardiff Agreement to Deepen Cooperation on Shared Policy Priorities
UK Government Moves to Fully Fund Teacher Pay Award as Strike Threat Recedes
UK Competition Regulator Deepens Scrutiny of Microsoft’s Business Software and AI Market Position
NHS England Reforms Focus on Cutting Waiting Lists and Improving Digital Care
England Maintains Mandatory Housing Targets in Push for 1.5 Million New Homes
UK Government Plans Statutory Industrial Strategy Council to Strengthen Long-Term Economic Policy
Asthma Charity Warns of Major Gaps in Childhood Diagnostic Testing Across England
TUC Chief Paul Nowak Appointed to Bank of England Court
Bristol Opens £35 Million Deep-Tech Innovation Hub at Temple Quarter
Oxfordshire Village Votes Symbolically to Leave UK Over Asylum Housing Plan
Andy Burnham Deepens UK Defense and AI Cooperation With NATO and Canada
UK Government Announces Neonatal Safety Reforms After Thirlwall Inquiry
Bank of England Weighs Rate Decision as UK Inflation Rises to 3.1%
UK Health Unions Warn of Staffing Pressures as Public and Private Pay Growth Diverges
Rockstar Games Faces Tribunal Claims From 23 Former Grand Theft Auto VI Developers
UK Treasury Faces Tighter Budget Constraints as Borrowing Costs and Pension Spending Rise
Prime Minister Andy Burnham Sets Out Ten-Year Plan for Greater Public Oversight of Utilities
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
Scotland, Wales and Northern Ireland Leaders Coordinate Push for UK Constitutional Change
Police Tighten Public-Order Measures After Anti-Immigration Protests in Dover and Portsmouth
UK Ministers Pressed for Answers After US Diplomat Accused of Child Abuse Images Leaves Britain
Jaguar Land Rover Pursues NATO Defense Contracts for Defender Vehicles
British Service Member Dies in Road Accident While Deployed in Ukraine
George Osborne Calls for Britain to Rejoin EU Customs Union
Anthropic Chief Dario Amodei Urges Faster UK Action on Advanced AI Risks
UK State Pension Set for 3.9% Rise Under Triple Lock
UK Labour Market Cools as Payrolled Employment Continues to Decline
Reform UK’s £72 Million in Donations Faces Scrutiny Under Proposed Retrospective Funding Rules
UK Doctors Warn Expanded Pharmacy First Scheme Could Put Patients at Risk
British Airlines Cut Short-Haul Capacity as Jet Fuel Costs Rise
UK News Publishers Forecast 40% Search Traffic Drop as AI Overviews Expand
Axel Springer Wins Approval for £575 Million Daily Telegraph Acquisition
London Mayor Sadiq Khan Opposes Heathrow Third Runway Over Climate Targets
Scotland, Wales and Northern Ireland Leaders Hold Summit Seeking Greater Autonomy
UK Energy Price Cap Set to Rise to £1,723 in October
×