Chancellor Rishi Sunak has warned that the coronavirus pandemic has dealt "lasting" damage to the economy as official forecasts predicted the biggest economic decline in 300 years.
The UK economy is expected to shrink by 11.3% this year and not return to its pre-crisis size until the end of 2022.
Government borrowing will rise to its highest ever level outside of wartime to deal with the economic impact.
Mr Sunak said: "Our economic emergency has only just begun."
The government's independent forecaster, the Office for Budget Responsibility (OBR) expects growth of 5.5% in 2021 and 6.6% the following year.
Mr Sunak said the government had already spent £280bn to help support the economy through the coronavirus.
It will spend a further £55bn next year as part of a package of measures to support the recovery. This includes billions of pounds to help people find jobs.
However, Mr Sunak said long-term scarring meant the economy would be 3% smaller in 2025 than expected in the March budget.
The OBR expects unemployment to peak at 2.6 million next year, although fewer jobs are expected to be lost than predicted this summer.
The government has extended its furlough scheme to support jobs and wages until next March.
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2020-11-25 13:21:00Z
CBMiLGh0dHBzOi8vd3d3LmJiYy5jby51ay9uZXdzL2J1c2luZXNzLTU1MDcyNDQ30gEwaHR0cHM6Ly93d3cuYmJjLmNvLnVrL25ld3MvYW1wL2J1c2luZXNzLTU1MDcyNDQ3
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