The UK’s economy needs a £164bn cash injection to restart it fully after the COVID-19 crisis, a think tank has said.
Research by the IPPR warns that without an ambitious cash injection in the upcoming spending review, the UK’s economy will lag seven percentage points behind pre-COVID level next year.
Its research argues that borrowing more will actually mean lower debt as a share of GDP. It also argues that the fiscal stimulus will deliver all the climate investments needed to reach the UK’s net zero emissions target, restore public services to their pre-austerity level, and tackle the health crisis.
Carys Roberts, IPPR executive director, said: ‘This tide of hardship will only swell without adequate support for the economy, including through ‘scarring effects’ that will make it harder for businesses and people to survive and thrive. Decisions taken today will determine whether businesses can recover, and the state and shape of the economy for years to come.
’But there is no “going back” to the pre-pandemic economy, as if its course had merely been paused. Instead we should use government intervention now to build back the kinds of economic activity we really value, instead of pursuing only GDP.’