Chancellor Rishi Sunak has unveiled a £30bn package to help the economy get through the coronavirus outbreak.
He is abolishing business rates for many firms in England, extending sick pay and boosting NHS funding.
He warned of a significant but temporary disruption to the UK economy but vowed: “We will get through this together.”
The Bank of England announced an emergency cut in interest rates just ahead of the Budget on Wednesday.
Mr Sunak, who was promoted to chancellor just four weeks ago after Sajid Javid quit the government, has had to hastily re-write the government’s financial plans to deal with coronavirus.
“We are doing everything we can to keep this country and our people healthy and financially secure,” he told MPs.
Labour leader Jeremy Corbyn said he “welcomed” many of the measures to “head off the impact” of coronavirus.
But he said the extra money for the NHS was “too little, too late” and the UK was going into the crisis with its public services “on their knees” after years of Conservative cuts.
The measures put in place to mitigate the effect of the coronavirus outbreak include:
- Statutory sick pay for “all those who are advised to self-isolate” even if they have not displayed symptoms
- Business rates for shops, cinemas, restaurants and music venues in England with a rateable value below £51,000 suspended for a year
- A £500m “hardship fund” to be given to local authorities to help vulnerable people in their areas
- “Fiscal loosening” of £18bn to support the economy this year, taking the total fiscal stimulus to £30bn
- A “temporary coronavirus business interruption loan scheme” for banks to offer loans of up to £1.2m to support small and medium-sized businesses
- The government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work “due to coronavirus”
- Those on in-work benefits who get ill will be able to “claim from day one instead of day eight”.
The number of coronavirus cases in the UK reached 456 on Wednesday, with a sixth person confirmed to have died after contracting the virus.
The chancellor said that without accounting for the impact of coronavirus, the Office for Budget Responsibility has forecast growth of 1.1% in 2020, 1.8% in 2021 and then 1.5%, 1.3%, and 1.4% in the following years.
In other Budget measures, the chancellor announced that fuel duty would be frozen for another year.
A planned increase in spirits duty will be cancelled and duties for cider and wine drinkers will be frozen as well.
The so-called tampon tax will be abolished, and VAT on books, newspapers, magazines and academic journals will be scrapped from 1 December.
He announced more than £600bn for road, rail, housing and broadband projects over five years, aimed at delivering on the Conservatives’ election promise to boost economic growth outside of London and the south-east of England.
This would bring “net public investment to the highest levels in real terms since 1955”, said the chancellor.
He vowed to “change the whole mindset of government”, announcing plans for Treasury offices in Scotland, Wales and Northern Ireland and a “new economic campus in the north, with over 750 staff from the Treasury”.
He also promised an additional £640m for the Scottish government, £360m for the Welsh government, £210m for the Northern Ireland executive and £240m for new city and growth deals.
Mr Sunak said he was providing £200m for local communities to build flood resilience and would double investment in flood defences.
In other developments:
- The Bank of England has announced an emergency cut in interest rates from 0.75% to 0.25% in response to the economic impact of the coronavirus outbreak
- NHS England is scaling up its capacity for testing people for the infection. Public Health England, which has already carried out more than 25,000 coronavirus tests across the UK, is set to expand the number of people it can test a day to 10,000 - currently 1,500 are being carried out
- Health minister and Conservative MP Nadine Dorries has been diagnosed with coronavirus and is self-isolating at home.
A planned National Infrastructure Strategy, including more details of how the extra money promised by the Chancellor will be spent, has been delayed.
And Mr Sunak will deliver another Budget in the Autumn, which is likely to be include more ambitious plans to “level up” the economy and deal with post-Brexit trading arrangements with the EU.
The Budget comes in a week in which shares around the world - already hit by fears about coronavirus - suffered some of their biggest falls since the 2008 financial crisis.
Dubbed “Black Monday”, indexes tumbled as a row between Russia and Saudi Arabia saw oil prices plunge, with declines in London wiping some £125bn off the value of major UK firms.
Figures released by the Office for National Statistics found that the UK economy did not grow at all in January.
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