UK borrowing feels the pandemic, goes over record $162 billion

The British government borrowing went over $162 billion (128 billion Pounds) billion over the first three months of the 2020/21 financial year. This was when the country was under a strict lockdown.

The amount is over twice the entire of last year’s borrowing figures. According to many, this year’s borrowing will be the British government’s largest since World War Two.

Highest for June

In June alone, the borrowing was worth 35.5 Pounds, as per data from the government statistics office. This figure excludes state-owned banks. This was much higher than figures from the same period in the last year, but much below the Reuters forecast of 41. billion Pounds.

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In all, April, May, and June amount for the highest borrowing in the country’s country. The tax revenues, however, were higher, but spending on employment support went down.

"Borrowing is still rising at an exceptional rate and we suspect that a slowdown in the recovery and further rise in unemployment later this year will prompt the government to announce additional fiscal spending at the next budget," Thomas Pugh, UK economist at Capital Economics told Reuters.

Measures in place

Just last week, finance minister Rishi Sunak rolled out measures worth 30 billion Pounds. This was done to resuscitate businesses, while expecting companies to take back workers as the country’s scheme to support those on furlough will end in October 2020. This scheme supported over 9 million jobs in the UK.

The public sector debt now stands at 1.984 trillion Pounds, which amounts for 99.6 per cent of the GDP. Data says that this is the highest debt for the country since the 1960s.

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"Over the medium-term, we must, and we will, put our public finances back on a sustainable footing," Sunak said on Tuesday.

Additionally, the UK government recently announced extra spending and tax cuts amounting worth 192 billion Pounds for the ongoing financial year.

The economy is expected to shrink by 12.4 per cent throughout the year. The unemployment rate in the country is expected to rise by 11.9 per cent toward the end of 2020.