Thursday 04 March 2021

*UKHotViewsExtra* Budget 2021: the long road to recovery

Budget 2021 reportAfter a year of unprecedented challenges, the March Budget sets out the first steps the Government is taking to support the UK's recovery from the COVID-19 pandemic. Digital technologies only had a cameo role, but there was much that will interest software and IT services providers, particularly SMEs.

The Office for Budget Responsibility's (OBR) economic and fiscal outlook makes the scale of the challenge clear. The pandemic has pushed government borrowing to its highest level since 1944-45 and will push public sector net debt to reach its highest level since 1958-59. GDP fell 9.9% in 2020, the largest decline in the G7 and the largest economic shock the country has faced in 300 years; borrowing will reach 16.9% of GDP in 2020-21; and public sector net debt is set to rise to 109.7% of GDP in 2023-24. Taking into account the COVID-19 measures announced at Budget 2020 (see Budget 2020: the implications for tech firms), total support for the economy amounts to £407bn in 2020-21 and 2021-22.

UKHotViews Premium logoUnsurprisingly, the Chancellor of the Exchequer, Rishi Sunak, said that repairing the long-term damage of the pandemic will take time. The measures announced in the Budget will protect the economy in the short-term, will maintain funding for public services (as announced in Spending Review 2020), but are unlikely to be sufficient to secure the long-term recovery.

TechMarketView subscribers, including those signed up to UKHotViewsPremium can read more coverage of Budget 2021 and its implications here. If you are not yet a subscriber, please contact Deb Seth to find out how to access this and much more.

Posted by Dale Peters at '09:42' - Tagged: investment   government   budget   tax   public+sector  

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