Chancellor Rishi Sunak will announce the heaviest public borrowing since World War II when he spells out his spending plans next week in the wake of the biggest economic crash in more than 300 years.

Spending on the pandemic is on track to exceed £200 billion this year after the extension of job protection programmes, and other costs are likely to spill into the 2021/22 fiscal year.

Only the armed forces will receive a multi-year increase in funding as Prime Minister Boris Johnson seeks to boost Britain’s profile outside the European Union.

Mr Sunak’s other spending announcements on Wednesday are likely to be dwarfed by the scale of new borrowing forecasts which will underscore the need for future tax increases.

“Events next week might... prove an important prelude for a pivot to a tighter fiscal approach in the spring budget,” economists at Citi said in a note to clients.

As the Chancellor starts to look for ways to begin reining in the huge surge in borrowing, there have been reports that he plans to freeze pay for public-sector workers other than health staff.

READ MORE: Threat of industrial action raised if Sunak imposes pay freeze on millions of public sector workers

Nicola Sturgeon 'considering' allowing restaurants to open for dinner service

HeraldScotland:

NICOLA Sturgeon is considering whether pubs and restaurants under level 2 and 3 restrictions could open later to serve evening meals – but has warned the measures are in place to “reduce the number of people coming together”.

In tier 3 of the Scottish Government’s Covid-19 strategy, local authority areas including Edinburgh and Fife have restrictions placed on hospitality businesses. Currently, no alcohol can be served to customers and traders can only operate from 6am until 6pm.

But businesses have appealed to the First Minister to “tweak the tiers” and shift the opening hours to let them offer a dinner service.

READ MORE: Edinburgh pubs and restaurants could open for dinner service

Early Christmas shoppers boost UK retail sales

HeraldScotland: Internet retailers are expecting the busiest day for Christmas shopping

Early Christmas shopping and discounting by stores helped to lift UK retail sales in October, according to new figures from the Office for National Statistics (ONS).

Sales rose by 1.2 per cent last month, with online stores doing well. However, clothing sales weakened.

Analysts warned that sales are likely to fall sharply in November because of the latest lockdown restrictions.

Deputy national statistician Jonathan Athow said: "Despite the introduction of some local lockdowns in October, retail sales continued its recent run of strong growth.

"Feedback from shops suggested some consumers may have brought forward their Christmas shopping, ahead of potential further restrictions. Online stores also saw strong sales, boosted by widespread offers.

"However, the slow recovery in clothing sales has stalled after five consecutive months of increased sales."

READ MORE: Scottish retail misery intensified ahead of latest lockdown moves

Sign up

You can now have the bulletin and the top business news stories sent direct to your email inbox twice-daily, as well as Business Week, the weekly round-up on Sunday:

https://www.heraldscotland.com/my/account/register/