Yahoo Finance UK borrowing jumps £347bn amid COVID pressures
The UK’s borrowing figures increased to 103% of the country’s gross domestic product (GDP) at the end of March 2021, up from 83% the previous year as the COVID pandemic forced the government to support businesses.
In just 12 months, the government’s debt jumped £347bn ($466bn), from £1,875.7bn to a record high of £2,223bn, according to the latest figures from the Office for National Statistics (ONS).
Debt as a percentage of GDP has nearly quadrupled since the early nineties and is now 12.4 percentage points above the EU average.
The UK’s debt as a percentage of GDP is the eighth highest in comparison with European Union member states — a list that is led by Greece, followed by Italy and Portugal.
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The ONS also said that UK debt as a percentage of GDP has risen more than the EU average during the COVID pandemic. It grew almost 19 percentage points, with only three EU member states reporting a higher increase — Spain (26.3 percentage points), Italy (21) and Greece (20).
The ONS had previously revealed that the UK government borrowed almost £17bn last December, the fourth highest December figure on record.
It took borrowing in the first nine months of the 2021-22 financial year to £147bn — £13bn less than the Office for Budget Responsibility (OBR), the independent body which compiles the government’s economic and financial forecasts, was expecting in October.
The OBR said higher income tax, corporation tax and VAT payments explained why the deficit had come in lower than forecast.
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Central government receipts came to £68.5bn last month, up 10% compared with December 2020, boosted by stronger tax receipts as the economy continued its recovery.
Total government spending came to £86.7bn last month, down £1bn from the same month in 2020, reflecting savings of £8.2bn from the pandemic job retention and self-employment support schemes that ended in October.
The ONS also confirmed that the deficit for 2021 stood at 15.3% of GDP, or £327.6bn — up from 2.6% in 2020.
