The Office for Budget Responsibility (OBR) forecast the British economy will contract this year by 11.3%, the largest fall in output for over 300 years. As the Covid-19 restrictions are eased the economy is predicted to grow by 5.5% in 2021 and by 6.6% in 2022.

Even with growth returning, the economic output is not expected to return to pre-crisis levels until the fourth quarter of 2022. The UK is forecast to borrow £394Bn this year, which is equivalent to 19% of GDP.

OBR expects unemployment to peak in the second quarter of 2021, with 2.6 million people out of work.

Reacting to the Spending Review, trade body UKHospitality believes hospitality jobs can ‘catalyse’ the UK’s economic recovery if the industry is supported through a ‘harsh winter’.

Commenting on the announcement, Kate Nicholls chief executive of UKHospitality, said: “Hospitality jobs are at the core of the grave unemployment forecasts the Chancellor, yet the sector has shown repeatedly, most recently in August, how those jobs can help deliver economic growth for the economy.

“But it can only do so if it survives the winter, and that means getting the necessary support now. The increase to the National Minimum Wage will be a great benefit to many workers in our sector only if the businesses that employ them are still around.

“The hospitality sector is key in preventing unemployment getting out of control. The sector is being hit hardest by this crisis, but it is also the sector, which could lead the recovery of the economy if given the chance.

“We can only deliver the growth that the Treasury desperately needs if we survive the winter. If hospitality does not get the support it needs right now, businesses will fold and jobs will be lost.

“That is not just a disaster in the short term, it undermines the efforts to recover next year and into 2022. We have already lost 600,000 jobs. Support must be comprehensive and swift if we want to stop that figure from rising and avoid the nightmare of unemployment the Chancellor spoke of.”

Sunak announced a new £4.6Bn package to help people get back into employment, including the Kickstart scheme that subsidises jobs for young people.

Ian Wright CBE, chief executive of the Food and Drink Federation (FDF), added: “[The] Spending Review announcement will be broadly welcomed by the food and drink industry, particularly the Chancellor’s commitment to additional investment in skills.

“The lifetime skills guarantee will be key to helping upskill the UK’s workforce, whilst Kickstart, the Youth Offer and other schemes will provide much needed additional support to those younger people who have been hardest hit by the pandemic.

“[The] announcement presented a unique opportunity for the Chancellor to show his support for the food and drink supply chain and its 4.3m employees – sectors severely impacted by the Government’s closure of the hospitality industry.

“If the government wishes to further support UK industry it must also consider whether it presses ahead with those policies which would deter investment and suffocate profitability.

“Proposals such as the proposed online advertising ban on HFSS foods would impact a broad swathe of products and inhibit innovation across our industry.”