June 5, 2020 / 7:53 PM / a month ago

UK's Sunak to delay major stimulus package until autumn: FT

FILE PHOTO: Britain's Chancellor Rishi Sunak chairs the daily COVID-19 briefing at 10 Downing Street in London, Britain May 29, 2020. Andrew Parsons/10 Downing Street/Handout via REUTERS

LONDON (Reuters) - British finance minister Rishi Sunak has decided to delay a major stimulus package until the autumn to see how the economy fares in the coronavirus fallout, the Financial Times reported on Friday.

Sunak will still announce some limited measures next month, but this would not be a “Budget or mini-Budget”, an ally of Sunak told the FT.

“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 finance ministry said in response to the FT report.

Prime Minister Boris Johnson on May 27 promised that a post-coronavirus recovery package would be put before parliament. Sunak has also talked about the need to focus resources on national recovery.

The Daily Mail newspaper reported that Johnson is drawing up an economic recovery bill with the goal of reducing red tape and reviving the economy from the effects of the virus outbreak.

Ministers have been asked to submit suggestions and Johnson’s plans may include reforms to revive infrastructure development that has been halted by the COVID-19 lockdown, the Daily Mail reported, without giving financial details.

Neither the prime minister nor the finance minister have formally set out a timeline, and Sunak has declined to say whether he would bring forward his next budget statement, due in the autumn, to spell out how he will tackle Britain’s surging debt.

Britain’s emergency public spending surge and tax cuts to soften the coronavirus hit to the economy will cost around 133 billion pounds ($169 billion) in the current financial year, the fiscal watchdog has said, helping to lift the budget deficit to wartime levels.

Reporting by Kanishka Singh and Andy Bruce; Editing by William James and Daniel Wallis

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