UK faces worst economic hit in 300 years as coronavirus damage to last until 2024

Chancellor of the Exchequer Rishi Sunak will need more than Eat Out to Help Out to get the economy back on track

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The UK is facing the worst hit to its economy in more than 300 years due to coronavirus, with fears the effects will last until 2024.

Reports claim the Government's forthcoming Spending Review will reveal the UK's economy will contract by almost 11% in 2020, the worst annual performance for more than three centuries.

The pandemic has reaped huge damage on the economies of countries around the world as businesses are forced to shut and people stay at home to curb the spread of the deadly disease.

The Financial Times said, based on previous Office for Budget Responsibility and Bank of England statements, the Chancellor Rishi Sunak is likely to publish forecasts showing the country's economy would still be reeling from the impact of Covid-19 by the time of the next general election.

But that hasn't stopped Boris Johnson announcing plans for the 'biggest programme of investment in Britain's armed forces since the end of the Cold War'.

Officials said it would cement the UK's position as the largest defence spender in Europe and the second largest in Nato.

The Chancellor is due to set out his Spending Review later this month
(Image: Andrew Parsons / No 10 Downing Street)

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As well as promising a new space command, the Prime Minister will also set out plans for a national cyber force to protect the country from attack.

Washington's acting secretary of defence, Christopher C Miller, said in a statement the US "applauds the announcement", which he added would ensure "the UK military continues to be one of the finest fighting forces in the world".

"Their commitment to increased defence funding should be a message to all free nations that the most capable among us can – and must – do more to counter emerging threats to our shared freedoms and security," Mr Miller said.

The move will be underpinned by an additional £1.5 billion investment in military research and development with a commitment to invest further in the Future Combat Air System to develop the next generation of fighters for the RAF.

Downing Street said that together, the various projects were expected to create up to 10,000 thousand jobs a year across the UK.

Defence Secretary Ben Wallace said: "This is excellent news for defence, and provides us with the financial certainty we need to modernise, plan for the future and adapt to the threats we face."

Labour's shadow defence secretary John Healey said: "This signals a welcome and long overdue upgrade to Britain's defences after a decade of decline.

"Since 2010 the size of the armed forces has been cut by a quarter, defence spending was cut by over £8 billion and the defence budget has a £13 billion black hole."

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