The Deputy Governor of the Bank of England and member of the Monetary Policy Committee, Ben Broadbent, stated that consumer spending in Britain has been partially supported by the British government, with future financing expected to come from taxes.
Broadbent mentioned that state support for the economy is not a free lunch and that the decline in total consumer spending is almost certain to be more extensive and widespread. Its impact will not be limited to certain economic sectors at this stage but will also affect the government’s response regarding the job protection program, which significantly helped protect household incomes in 2020. The cost of this program is expected to rise due to repeated extensions, which have thus far led to expenditures of £46 billion. Economists have expressed concern that the lockdown and related spending could raise the national debt in the UK by nearly half a trillion pounds this year.
