UK budget lays stress on infrastructure

British Chancellor of the Exchequer Rishi Sunak on Wednesday unveiled his first budget since Prime Minister Boris Johnson's election victory against a political backdrop almost unprecedented in recent years.

Sunak only took over as the government's economic chief less than a month ago, following the resignation of Sajid Javid, and was tasked with delivering the first budget since Britain left the European Union at the end of January, but since then the coronavirus outbreak has flared up into an issue of international political and economic priority.

In addition, Monday's global stock market slump and figures released by the Office for National Statistics revealing that the United Kingdom's economy did not grow at all in January have added to the burden of expectation.

But Sunak put on a brave face before his budget speech, saying his plans would help make the country "one of the best placed economies in the world to manage the potential impact of the virus", and telling Cabinet colleagues that the matter would be "front and center in our minds" in his speech.

Over the next five years, more than $776 billion has been set aside for infrastructure projects, such as investment in road building projects and railway networks, and a doubling of expenditure on flood defenses.

There will be measures to help with affordable housing and broadband roll-out, which he said would target "every region and nation of the UK", in line with the government's preelection promises, and value added tax on women's sanitary products will be scrapped.

Labour's shadow chancellor John McDonnell was dismissive of the pledges, saying: "Johnson has a track record of boastful claims followed by nondelivery and it looks like he is running true to form."

Sunak's speech also included measures to help small businesses and the self-employed deal with the specific challenges that the novel coronavirus outbreak poses, and he said that the National Health Service will be given "whatever resources it needs" to deal with the crisis.

Before the budget was unveiled, the Bank of England announced an emergency reduction in interest rates from 0.75 percent to 0.25 percent, cutting borrowing rates back to the lowest level in history, a move the Bank's outgoing governor Mark Carney said was timed for budget day to have "maximum impact".

"The Bank of England's role is to help UK businesses and households manage through an economic shock that could prove large and sharp, but should be temporary," he said.

The full economic impact of the coronavirus remained unclear, he added, suggesting that the UK economy may shrink over the next few months.