The UK Awaits as Sunak and Hunt Announce their Economic Plan for the Country

Prime Minister Rishi Sunak will decide how the country’s economy will proceed. Hannah McKay/ Reuters

On Nov. 17, 2022, British Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt will announce the government’s new spending plan. The announcement comes after being delayed three weeks from its original date of Oct. 31, 2022. The British economy has been experiencing a recession since former Prime Minister Liz Truss announced her agenda of austerity and trickle-down economics, which made the British Pound take a dive. Despite the fact that the country’s hatred of this idea was one of the reasons Truss ultimately resigned, many expect Prime Minister Sunak to announce a similar plan, at least in terms of austerity. 

The government is hoping that a combination of spending cuts and tax increases will help them come up with the £50-£60 billion they need to help pull the country out of the deep recession it is currently facing. Conservatives want to delay these changes until after the election in 2024, however economists around the world say that without some action from the government, the recession could last until 2024. The government has to balance the need with taking action with not moving too quickly, as that could make the recession worse. 

With this challenge in mind, economists also say that austerity might do more harm than good. The last time the government used an austere agenda was after the recession in 2008, and the country’s Gross Domestic Product (GDP) shrunk by 1%. Right now, the United Kingdom cannot afford to reduce their GDP any more, as they are the only G7 country whose economy got smaller over the pandemic.  

Thirugnanam Sureshan in his apartment with his wife. AP Photo/David Cliff

Even though easing the hardships of the British population is one of the main focuses of Sunak, which is why he is making reducing inflation a top priority, those who are in the poorest economic classes worry that austerity measures will make it impossible for them to afford to live. Thirugnanam Sureshan, a disabled man in East Sussex, England, says that because of his thyroid problems, his body cannot tolerate the cold very well, but because of rising energy prices, his wife is struggling to pay to keep the heat on in their house. It is estimated that right now food, energy, and housing costs are taking up a fifth of household savings, and some families do not have any money to spare. The National Institute of Economic and Social Research said that the government should increase borrowing instead of cutting spending, in order to help the people that need it most, like Mr. Sureshan.  

Another struggle the government is facing is establishing legitimacy. Sunak only took office on Oct. 25, being the third prime minister in two months. As soon as he took office he said his priority was “economic stability and restoring confidence that the United Kingdom is a country that pays its way.” However, it remains to be seen if Thursday’s announcement will help that goal, or put the country into an even further recession. The world will be watching to see whether Prime Minister Sunak will be the one to bring the country back to prosperity.