Budget 2020: The economic and fiscal story in five charts

What’s the big picture on the public finances? In short: more borrowing, more spending and more debt

The Treasury was briefing in advance that this would be a “coronavirus budget”.

And there’s no question that Rishi Sunak’s fiscal statement on Wednesday was dominated by the Government’s response to the health crisis.

The new Chancellor announced some £12bn in loans, tax and other official schemes to help small businesses cope with the knock-on impacts of the crisis, plus more funding for the National Health Service in the face of the epidemic.

Mr Suank also unveiled around £18bn of additional public spending for 2020-21, leading the Chancellor to boast of a £30bn stimulus “to support British people, British jobs and British businesses through this moment.”

This equates to around 1.3 per cent of GDP.

So what’s the big picture on the public finances as a result?

First it’s important to note that the £12bn of coronavirus-related spending for this year was decided upon too late to be included in the official forecasts of the Office for Budget Responsibility (OBR) or indeed the Treasury’s own official costings of its announcements.

Despite this the clear picture from both of those forecasts is one of more borrowing and more debt.

Almost £20bn of extra borrowing every year over the next five years is planned.

This will be the biggest “fiscal loosening” from any government in almost three decades according to the OBR.

There’s a major increase in state capital spending – things like road, rail and broadband installation – to around £79bn by 2024-25, or 3 per cent of GDP in that year.

But that commitment to spend 3 per cent of GDP on investment was in the Tory manifesto.

More surprising is the pencilled-in increases in day-to-day public service spending.

On a per person basis this is apparently set to reverse most of the cuts of the past decade.

If that comes to pass the claim “austerity is over” really will arguably have a solid basis.

The OBR, again surprisingly, says the Government is on course to meet its own fiscal rule of balancing the government’s day-to-day budget in three years’ time.

And the debt to GDP ratio still falls over the forecast period in the official projections.

But there’s a huge neon-illuminated caveat here. The GDP growth forecasts presented by the OBR are based on the assumption that there is no coronavirus-driven recession.

If things do get worse for the UK economy – if activity takes the kind of hit in the coming months that many other forecasters expect – those official fiscal targets are likely be toast.

To that extent this really is the coronavirus budget – and for good or ill will be remembered as such.