UK gov’t borrowing rockets due to coronavirus impact

The coronavirus pandemic has had an unprecedented impact on British government borrowing, leading to an estimate of 127.9 billion pounds (US $1,621 billion) from April to June, more than doubling the amount in the whole of the last financial year, official statistics revealed.

Borrowing in June is estimated to have been 35.5 billion pounds (US $44.9 billion), lower than in April and May, but is still roughly five times that in June 2019, according to the Office for National Statistics (ONS), Xinhua news agency reported.

The government’s job retention scheme, which pays 80 percent of workers’ salary to those unable to work because of the coronavirus outbreak, has substantially increased central government expenditure, the ONS said.

Debt at the end of June was 1,983.8 billion pounds (US $2,518.3 billion), and the debt to GDP ratio was 99.6 per cent, the highest since 1961, data showed.

Analysts attributed the record borrowing to the fall in economic activity caused by lockdown and the government’s measures to combat the crisis.

The Institute for Fiscal Studies warned earlier that its fiscal consequences will continue to make themselves felt for years, and more likely decades, to come.