Spending

Sunak plans to extend foreign spending freeze for two years: report

Britain’s new Prime Minister Rishi Sunak could freeze the country’s foreign aid budget for another two years, the Telegraph has reported citing sources. Current foreign aid expenditure for the country is set at 0.5% of national income. Two years ago, the country was forced to cut spending on foreign aid due to a financial blow from the Covid-19 pandemic.

Sunak had said last year that foreign spending should return to 0.7% of economic output by 2024-25. However, the Telegraph reported that the authorities are considering extending the cut in foreign aid spending for another two years until 2026-2027.

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Deeper cuts are also being considered, along with an option to link foreign aid spending to inflation for three years in the future. The government is currently planning spending cuts and reversing tax cuts. Inflation is at a high level, with the cost of mortgages rising and food, fuel and heat becoming more expensive.

Earlier on Friday, Sunak said tough decisions will have to be made to put UK government borrowing and debt on a sustainable path. He further stated that he was confident to fix the economy.

“We face many challenges as a country, but I’m confident we can fix the economy,” Sunak told reporters during a visit to a south London hospital.

“The Chancellor has said before, of course, that tough decisions will have to be made and I will sit down and work with him…we need to do these things so that we can get our borrowings and debts back on a sustainable path.”

(With agency contributions)