Government borrowing hits record high amid coronavirus

Friday, May 22, 2020

Heavy spending in the battle against coronavirus meant government borrowing soared to £62.1 billion last month, the highest figure for any month on record, new data shows.

The Office for National Statistics (ONS) said public sector borrowing in April - excluding banks owned by the state - was £51.1 billion higher than the same month last year.

The April figure is almost equal to that of the entire 12 months before, which stood at £62.7 billion.

It follows Chancellor Rishi Sunak's ramping up of financial support for businesses and employees after much of the economy was halted by coronavirus lockdown.

A fall in tax receipts also contributed to the need to borrow.

In April, central government tax receipts dropped by 26.5 per cent compared to April 2019, due to shrinking economic activity, rising unemployment, weaker earnings, and tax breaks given to companies in response to the lockdown.

The ONS cautioned that its first estimate of borrowing April could be significantly revised as the full impact of the outbreak becomes clearer.

Charlie McCurdy, a researcher at the Resolution Foundation (an income think tank), said the figures were a “stark illustration” of the costs of coronavirus and lockdown measures.

He said: “But while there is significant pressure on the public finances, there are no signs that the government is struggling to find the cash.

“Record low interest rates mean the UK's higher debt burden should remain more than manageable.”

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