Coronavirus: UK stimulus plan delayed until autumn

Britain's Chancellor of the Exchequer Rishi Sunak. Photo: Getty

Chancellor Rishi Sunak has decided to push back a major stimulus package of tax cuts and spending commitments until the autumn.

The finance minister wants to see how the economy fares in the wake of coronavirus, reports the Financial Times.

Speculation had been growing around the likelihood of a summer budget to kick-start the economy.

The treasury confirmed this week that the chancellor will announce limited measures in July, but this will not be an emergency budget or mini-budget.

The Treasury has spent £133bn ($169bn) mitigating the financial damage caused by the COVID-19 outbreak and wants to delay making irreversible spending commitments, according to the FT. Britain's budget deficit is now at wartime levels.

The department said: “We will be taking stock of the economic situation, and looking at if and where further support makes sense ahead of the more significant moments in the autumn.”

The prime minister previously promised a post-coronavirus recovery package would be put before parliament but no timeline has been formally set.

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It is believed that Johnson wants to devise a recovery bill with the goal of reducing red tape and rebooting the economy.

He has also suggested that young people should be "guaranteed an apprenticeship” and the government would invest in renewable technology including electric cars.

Smaller local authority projects, including improvements to cycling and pedestrian infrastructure, are also expected to feature in the plan.

Ministers have also been asking business groups to provide ideas for deregulation.

The treasury added: “The first phase has seen us help families and businesses through the crisis, and as the economy opens up we will move into a new phase. This will obviously have to be timed correctly so people get help at the moment they need it."