Yahoo Finance Coronavirus: UK government borrowing hits quarterly record
The UK government borrowed a record £128bn ($161bn) between April and June to fund its coronavirus stimulus measures, more than double the previous quarterly record set during the financial crisis.
The Office for National Statistics (ONS) estimated on Tuesday that public borrowing in the first quarter of the country’s 2020/21 financial year hit its highest quarterly level since records began in 1993, with borrowing in June alone hitting £35.5bn.
The surge in state borrowing comes after the UK government unleashed an unprecedented package of spending to tackle the economic effects of the coronavirus pandemic.
It does not, however, reflect the new pledges announced by chancellor Rishi Sunak during last week’s summer statement.
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“It’s clear that coronavirus has had a significant impact on our public finances, but we know without our response things would have been far worse,” Sunak said on Tuesday.
“The best approach to ensure our public finances are sustainable in the medium-term is to minimise the economic scarring caused by the pandemic.
While the £35.5bn borrowed in June represents a five-fold increase on the same month last year, it came in below analyst expectations of £45bn, and below May’s total of £45.5bn.
The total borrowing in the quarter is more than double the total from the entirety of the 2019/20 financial year, according to the ONS. Last month, UK debt passed 100% of GDP for the first time since 1963.
The Office for Budget Responsibility said last week that the cost of tackling the coronavirus crisis would lead to an “unprecedented” rise in state borrowing to £322bn this year.
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Partly reflecting Sunak’s new stimulus measures, the government spending watchdog also increased its estimate for the cost of the government’s response to the crisis.
The watchdog expects the Treasury to spend £192.3bn this year tackling the pandemic, up from a previous estimate of £132bn.
The chancellor last week announced stimulus measures worth £30bn to kickstart the country’s economic recovery.
Jobs were the main theme of the summer statement, with a particular focus on young job seekers.
“Our plan for jobs does this by providing significant and targeted support where it’s needed the most, to ensure nobody is left without hope as we reopen our economy,” Sunak said on Tuesday.
“I am also clear that, over the medium-term, we must, and we will, put our public finances back on a sustainable footing.”
