Finance minister Rishi Sunak has warned that Britain's economy would get worse before it got better, with the country now in its third national lockdown and struggling to contain the spread of Covid-19.
Rishi Sunak said the new health restrictions were necessary but would have a significant economic impact.
"We should expect the economy to get worse before it gets better," he told parliament yesterday.
The UK economy looks likely to tip back into recession - shrinking in the final quarter of 2020 and the first quarter of 2021 - after a record 25% fall in output in the first two months of lockdown last year.
Earlier British Prime Minister Boris Johnson said Britain was in "a race against time" to roll out Covid-19 vaccines as deaths hit record highs and hospitals ran out of oxygen.
His top medical adviser also warned that the pandemic's worst weeks were near.
Sunak implied there would be no additional economic support announced before the March 3 budget, beyond last week's £4.6 billion package for businesses hit by the renewed lockdowns.
"The budget is the appropriate place to consider those (measures) given the scale of the response and indeed the fact that all of our major avenues of support have been extended through to the spring," he said.
Covid-19 deaths in the UK have been soaring and now exceed 81,000 - the world's fifth-highest toll - while more than 3 million have tested positive.
Sunak has previously announced emergency help for the economy worth £280 billion, including a massive job protection scheme that runs until the end of April.
He took issue with official statistics that show British economic output has suffered a bigger hit during the pandemic than almost any comparable countries.
"It is very clear that the way we calculate that output flatters other countries and disadvantages us when it comes to making those comparison," he said.
British statistics showed a sharp fall in public sector output during the first lockdown - reflecting reduced hospital capacity to perform operations and disruption to schooling - despite a big increase in overall public spending.