Vehicles and pedestrians are seen on the Tower Bridge in London, Britain, on Jan. 5, 2021.(Photo: Xinhua)

Britain unveils its latest budget Wednesday, looking to fix the public finances after emergency pandemic support sent debt rocketing.

While attempting to bring down the deficit, Prime Minister Boris Johnson's government is set also to confirm multi-billion pound funding projects aimed at driving long-term recovery and reducing pressure on the state-run health service. 

Finance minister Rishi Sunak delivers his tax and spending plans in parliament, grappling not just with the pandemic but with problems associated with Brexit. 

"Today's budget begins the work of preparing for a new economy post-COVID-[19]," he is set to say, according to excerpts of his speech released by the finance ministry. "An economy of higher wages, higher skills, and rising productivity. Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism," Sunak will add.

On the eve of the budget, the government revealed plans to raise minimum wage rates and end a freeze on pay rises for the public sector workers.

But the boost to salaries is likely to be offset by rising inflation, which is denting Britons' spending power, especially as energy bills soar with the UK reopen for business following lockdowns.

A further hit has come from the government returning welfare benefit payments to pre-pandemic levels, after a temporary hike to help families through the virus outbreak.

British unemployment meanwhile risks soaring in the coming months after the government ended its costly jobs furlough scheme, which paid the bulk of wages for millions of private-sector workers during the pandemic.

Government borrowing rocketed to around 320 billion pounds ($442 billion) in the financial year to March, driven higher by costly COVID-19 support. That was equivalent to 14.9 percent of gross domestic product, the highest UK level since the end of World War II.

Sunak will have drawn comfort from recent news that state borrowing dropped by more than expected in September, aided by falling COVID-19-related expenditure and rising tax receipts as the economy slowly recovers. At the same time, the debt outlook remains clouded by the prospect of higher interest payments. 

While reducing the deficit is a priority for Sunak, the chancellor wants to drive recovery with the help of large spending projects as well.