Yahoo Finance Coronavirus: UK's COVID-19 spending surge fuels a soaring budget deficit
Britain’s budget deficit — the amount by which expenditure exceeds revenue — has soared after government spending overshot targets due to the onset of the coronavirus pandemic.
The government’s full-year borrowing surged in March, hitting the highest level since 2016, as chancellor Rishi Sunak unleashed a raft of emergency financial measures to help the UK economy weather storm from the spread of COVID-19.
The Office for National Statistics (ONS) said public sector borrowing, which excludes banks owned by the state, leapt by £9.3bn ($11.28bn) to reach a higher-than-forecasted £48.7bn in the financial year to 31 March. Borrowing last month made the full year come in higher than the £47.4bn forecast by the independent fiscal watchdog, the Office for Budget Responsibility (OBR).
“The coronavirus (COVID-19) pandemic is expected to have a significant impact on the UK public sector finances,” said the ONS.
Read more: UK launches massive bond sales to fund COVID-19 spending surge
“These effects will arise from both the introduction of public health measures and from new government policies to support businesses and individuals. The full effects of COVID-19 on the public finances will become clearer in the coming months.”
Meanwhile, the UK government plans to sell more bonds over the next three months to help fund its spending to battle the coronavirus.
The UK Debt Management Office said on Thursday (23 April) it planned to issue £180bn of government debt between May and July to finance the chancellor’s “unprecedented measures” to help mitigate some of the impact COVID-19 is having on the economy.
