The UK economy is set to contract by 11.3 per cent in 2020, the worst in 300 years, Rishi Sunak, the Chancellor of the Exchequer confirmed on Tuesday as he presented the country’s spending plan to the parliament.

The gross domestic product slump will be worse than the recession of 1921, when Britain’s economy shrank almost 10 per cent in the aftermath of the First World War and the Spanish flu epidemic.

It means 2020 will see the biggest contraction since 1709, when the Great Frost ravaged Europe’s economies, creating food shortages as livestock froze.

The UK Chancellor said, however, the economy is expected to grow by 5.5 per cent next year.

But output will not return to pre-crisis levels until the fourth quarter of 2022, he said.

The country is currently experiencing the second wave of the new Coronavirus pandemic with cases reaching 1,538,794 as of November 24, according to UK Public Health.

The UK imposed a second lockdown in England early this month, which has caused many economic activities in the country to fall to their lowest levels in November.

Sunak indicated that spending so much on international aid is difficult to justify with borrowing so high, and that at a time of unprecedented crisis, the government must make tough decisions.

His government plans to spend 0.5 per cent of national income on aid in 202, not 0.7 per cent as has been the case. This will amount to £10 billion.

He said it will be the UK government’s intention to return to 0.7 per cent. But even with this target, the UK will still be the second biggest aid spender in the G7, he noted.