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Spring Statement 2022
On Monday March 23rd 2020, the UK went into its first lockdown, following the outbreak and
rapid spread of coronavirus.
At this point, Rishi Sunak had been Chancellor of the Exchequer for little more than a month, having
replaced Sajid Javid on February 13th. He delivered his first Budget a month later, presenting what he then
described as a ‘temporary, timely and targeted’ response to the coronavirus outbreak. The measures, he
said, would ‘greatly improve’ the chance of the UK economy rebounding in the second half of the year. In
retrospect, perhaps the most prescient comment came from Andrew Neil, then working for the BBC, who
said that the Chancellor had “splashed the cash” and a huge increase in borrowing was on the cards.
As we all now know, the global pandemic had a much greater impact than Rishi Sunak could have
anticipated. In 2020, the UK economy contracted by 9.4%. Having started the year at 7,542, the UK’s
FTSE-100 index of leading shares fell 14% to end the year at 6,461.
And then the economy did bounce back. As the vaccine programme was rolled out and the pandemic
finally loosened its grip in 2021, the UK economy grew by 7.5%, while the stock market recovered nearly all
the lost ground, ending the year at 7,385. By January of this year, the papers were finally reporting that the
UK economy was back to ‘pre-pandemic levels’.
Many of our clients will know the famous quotation from former Prime Minister Harold Macmillan, who
when asked by a junior reporter what his greatest problem was, simply replied: “Events, dear boy, events.”
As Chancellor, Rishi Sunak has had more than his share of ‘events’. First, there was the pandemic and then,
on February 24th this year, the Russian invasion of Ukraine, as well as rising inflation, rapidly increasing
energy prices and a looming cost of living crisis. Despite the UK economy rebounding in 2021, the economic
background to the Spring Statement was anything but rosy.
