Rishi Sunak has said people should expect the economy ‘to get worse before it gets better’.
Giving an economic update in the Commons, the Chancellor said: ‘Even with the significant economic support we’ve provided, over 800,000 people have lost their job since February.
‘And while the new national restrictions are necessary to control the spread of the virus, they will have a further significant economic impact.
‘We should expect the economy to get worse before it gets better.’
He said that 10 million employees had been furloughed since the pandemic started.
This has led to economic problems. Mr Sunak said there had been the largest fall in annual output for over 300 years.
Mr Sunak said that the ‘road ahead will be tough’ as the UK recovers from the pandemic.
He told MPs: ‘While the vaccine provides hope, the economy is going to get worse before it gets better.
‘Many people are losing their jobs, businesses are struggling, our public finances have been badly damaged and will need repair.
‘Now, it is time for responsible management of our economy, taking the difficult but right long-term decisions for our country.
‘But, I am confident that with this comprehensive support that Government is providing and above all, the determination, enterprise and resilience of the British people, we will get through this.’
He went on: ‘Sadly, we have not and will not be able to save every job and every business.
‘But I am confident that our economic plan is supporting the finances of millions of people and businesses.
‘Across almost all areas of economic policy, we are providing comparable or greater support than all our international peers.
‘And as the Office for Budget Responsibility, the Bank of England and the IMF have all recognised, our economic response is making a difference – saving jobs, keeping businesses afloat and supporting people’s incomes.’