Sunak says growth best way to erode coronavirus debt mountain

FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak holds a COVID-19 Digital Press Conference at 10 Downing Street in London, Britain April 8, 2020. Pippa Fowles/10 Downing Street/Handout via REUTERS

LONDON (Reuters) – A rebound in economic growth, rather than tax rises or a long-term squeeze on spending, would be the best way to lower the burden of national debt created by the coronavirus shutdown, British finance minister Rishi Sunak said on Tuesday.

“Obviously this has cost a lot… but the best way out of this for all of us is to just grow the economy,” Sunak said at a daily government news conference when asked how he would repair the country’s finances after the pandemic has passed.

“The long-term impact on public finances, for example will be reduced. The interventions this year are temporary. The quicker we get back to normal, the quicker we get back to a sustainable set of public finances.”

Earlier on Tuesday the Office for Budget Responsibility said British national debt as a share of economic output could peak at 100% of GDP from 80% now, but should drop to 95% if the economy rebounds strongly after coronavirus curbs are relaxed.

Reporting by David Milliken, Editing by Paul Sandle

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