Britain must rebuild with an eye on debt levels, UK’s Labour says

Britain's Shadow Chancellor of the Exchequer Dodds talks to the media in London

LONDON (Reuters) -Britain must rebuild its economy after COVID-19 with one eye on rising deficit and debt levels, Labour’s would-be finance minister Anneliese Dodds said on Monday, criticising the government’s response to the crisis as wasteful and divisive.

Finance minister Rishi Sunak has promised there will be no return to austerity in a spending plan he is due to announce on Wednesday.

But his speech is likely to be overshadowed by official forecasts showing soaring national debt levels caused by a coronavirus pandemic that has forced large sectors of the economy and millions of jobs onto taxpayer-funded life support.

Speaking ahead of that announcement, Dodds criticised Sunak for wasting taxpayers’ money during the pandemic response, and cautioned that the deficit would still need to be addressed.

“While we may be currently in a situation where there are low interest rates, of course that may not continue forever. We don’t know what kind of economic circumstances are likely to be facing the country in the medium to long term,” Dodds told a Reuters Newsmaker event.

“The critical thing right now ..is to ensure that we have that economic capacity being built back up again, that we don’t see more jobs being lost more businesses going to the wall more reductions in consumer confidence and investor confidence – we’ve really got to stem that negative tide.”

(Reporting by Guy Faulconbridge, writing by William James; Editing by Kate Holton and Estelle Shirbon)

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