UK borrowing to hit peacetime high - Sunak

Britain will borrow almost 400 billion pounds this year - or close to $526 billion - to pay for the massive coronavirus hit to its economy.

That's according to finance minister Rishi Sunak on Wednesday (November 25) as he announced a one-year spending plan.

It means the the budget deficit will jump to its highest level since World War Two.

Sunak said Britain's economy is likely to shrink by just over 11% this year, before growing around 5.5% in 2021.

"Our health emergency is not yet over and our economic emergency has only just begun. So our immediate priority is to protect people's lives and livelihoods."

Public borrowing would be the equivalent of around 19% GDP - the highest ever during peacetime.

Sunak said the cost of the fight against the virus was now $373 billion - well up from a previous estimate of about $267 billion.

There were signs of early moves to offset some of his spending.

Sunak announced a pay freeze for most public sector employees, except health workers,

And a reduction in Britain's foreign aid budget - a move which drew criticism from aid groups and the spiritual head of the Church of England.

"I want to reassure the House that we will continue to protect the world's poorest, spending the equivalent of 0.5% of our national income on overseas aid in 2021, allocating 10 billion pounds at this spending review."

Wednesday's announcement comes with pressure also ramping-up over a Brexit trade deal.

Britain has just five weeks until its post-Brexit transition expires, and a new deal has not yet been agreed with the European Union.