People must now stay at home except for a handful of permitted reasons and schools have closed to most pupils.
The chancellor said the action was “regrettable” but it was “right we take these measures”, which will be reviewed on 15 February, to suppress the virus.
It came after UK chief medical officers recommended the COVID threat level be increased to five – its highest level.
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The prime minister said vaccinating the top four priority groups by mid-February could allow restrictions to be eased, with Cabinet Office minister Michael Gove telling Sky News the measures may remain until March.
Tough new lockdown restrictions forbidding people from leaving home for non-essential reasons have also come into force across the Scottish mainland – these rules will be reviewed later this month.
In Wales, which has been in a national lockdown since 20 December, schools and colleges will stay shut until 18 January for most pupils.
In Northern Ireland, which entered a six-week lockdown on 26 December, post-primary transfer tests have been cancelled.
The UK reported a record 58,784 cases on Monday, as well as a further 407 deaths within 28 days of a positive test.
Meanwhile, Prime Minister Boris Johnson is due to hold a press conference in Downing Street at 17:00 GMT with chief medical officer for England Prof Chris Whitty and the government’s chief scientific adviser, Sir Patrick Vallance.
Elsewhere, Mr Sunak has announced that businesses in the retail, hospitality and leisure sectors are to be given a one-off grant worth up to £9,000, with the measure costing £4bn across the UK.
