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Chancellor Rishi Sunak has warned of a significant but temporary disruption to the UK economy caused by the coronavirus outbreak, in his Budget.
But he promised a coordinated response, saying: “We will get through this together.”
“We are doing everything we can to keep this country and our people healthy and financially secure,” he told MPs.
The Bank of England announced an emergency cut in interest rates just ahead of the Budget on Wednesday.
Mr Sunak who was promoted to chancellor just four weeks ago after Sajid Javid quit the government, has had to hastily re-write the government’s financial plans to deal with coronavirus.
He will announce more than £600bn for infrastructure projects over five years, aimed at delivering on the Conservatives’ election promise to boost economic growth outside of London and the south-east of England.
But a planned National Infrastructure Strategy, including details of how the extra money will be spent, has been delayed.
And Mr Sunak will deliver another Budget in the Autumn, which is likely to be include more ambitious plans to “level up” the economy and deal with post-Brexit trading arrangements with the EU.
The chancellor is expected to announce more cash for the NHS to deal with coronavirus.
Businesses are also crying out for practical measures to keep them afloat if coronavirus takes a significant toll on the economy.
The chancellor has faced calls for a cut in VAT, a hardship fund, help for companies dealing with prolonged sickness absence and joint guarantees with the Bank of England for banks to keep lending and extend overdrafts to people and businesses.
He is also facing calls from Labour for paid sick leave guarantees for workers on zero hours contracts.
The number of coronavirus cases in the UK reached 382 on Tuesday, a rise of 63 since the previous day, with a sixth person confirmed to have died after contracting the virus.
In other developments:
- The Bank of England has announced an emergency cut in interest rates from 0.75% to 0.25% in response to the economic impact of the coronavirus outbreak
- NHS England is scaling up its capacity for testing people for the infection. Public Health England, which has already carried out more than 25,000 coronavirus tests across the UK, is set to expand the number of people it can test a day to 10,000 – currently 1,500 are being carried out
- Health minister and Conservative MP Nadine Dorries has been diagnosed with coronavirus and is self-isolating at home.
The Budget comes in a week in which shares around the world – already hit by fears about coronavirus – suffered some of their biggest falls since the 2008 financial crisis.
Dubbed “Black Monday”, indexes tumbled as a row between Russia and Saudi Arabia saw oil prices plunge, with declines in London wiping some £125bn off the value of major UK firms.
Figures released by the Office for National Statistics found that the UK economy did not grow at all in January.