The Government borrowing hits record £127.9bn in the first quarter of the financial year
The UK government has been forced to borrow a record £127.9bn between April and June to combat the coronavirus pandemic, more than double the amount it did over the whole of last year.
June borrowing hit £35.5bn for the government, the Office for National Statistics (ONS) said. That was five times higher than the previous year. But it fell below a Reuters poll of economist forecasting a sum of £41.5bn after a downward revision for May.
Nevertheless, June's borrowing figure was still the third highest monthly total since records began in 1993 and about five times more than the same month last year.
The figure took total government debt to a record £1.98 trillion.
ONS said debt at the end of June 2020 as a percentage of economic output was 99.6%, the highest debt to GDP ratio since the financial year ending March 1961.
The chancellor, Rishi Sunak, said that despite the impact on public finances it was important to continue supporting the economy to cut the chances of long-term scarring for jobs and growth.
However, he warned: “I am also clear that over the medium term we must, and we will, put our public finances back on a sustainable footing.”
Speculation has been mounting that Sunak could use his autumn budget later this year to either raise taxes or launch a renewed austerity drive to pay for the government response to Covid-19, as the state steps in with billions of pounds of financial support to soften the economic blow.
Posted on Jul 20, 2020.