UK Budget 2020: High Spending To Combat Coronavirus

UK Budget 2020: High Spending To Combat Coronavirus

Wednesday 11th March 2020 – 17:35 (GMT)
UK Chancellor of the Exchequer Rishi Sunak has delivered the first budget under the new Conservative government. Hours prior to him speaking in the House of Commons, the Bank of England unexpectedly cut the base rate of interest from 0.75% to 0.25% which hinted at the large levels of Government spending about to be announced.
Key highlights include:
    • £30bn fiscal stimulus package to combat negative impact of coronavirus, including statutory sick pay for those who are told to self-isolate and £5bn for the NHS
    • £175bn extra spending on infrastructure
    • Freeze on fuel and alcohol duty
    • National insurance threshold raised from £8632 to £9500 as of next month
    • Business rates cut to zero for SME’s
With no movement in levels of taxation, a majority of the new spending will be borrowed and was met with a mixed reaction on the markets. The pound fell sharply following the Bank of Englands rate move, only to recover and then fall again throughout the day. The FTSE 100 also dropped 1.4%, closing at its lowest level since February 2016.