£244bn public borrowing an all-time high

GOVERNMENT spending in the pandemic sent annual public borrowing up to £243.9 billion last month, nearly five times as much as it was last year, official figures will confirm this week.

On Tuesday, the Office for National Statistics is expected to say that the Exchequer borrowed £29billion in November, compared to just £5.4billion 12 months ago, to help pay for the Government’s increased pandemic spending.

Last month England was put into a second lockdown and the Chancellor extended furlough and other support schemes. The £243.9billion borrowed is the all-time record for a single financial year, more than £84billion higher than the previous record set in 2009, when the Labour administration borrowed £159.8 billion to respond to the global financial crisis.

Howard Archer, chief economic adviser to the EY ITEM Club think tank, said: “We expect the figures to show further year-on-year deterioration as furlough has been extended and the economy contracted in November.”

On Tuesday the ONS is also tipped to say the economy grew by 15.5 per cent during the third quarter, putting it on course to finish the year down 11 per cent.

Investec chief economist Philip Shaw said a combination of vaccines helping normal life to slowly resume and a trade deal with Europe should restore annual gross domestic product to growth next year.

However, he said 2021 will still be “difficult” due to spiking coronavirus cases and the risk of a third lockdown : “We’re looking for growth of 7.6 per cent next year and while you may think that’s good, don’t forget it comes after an 11 per cent decline in the economy.”

Elsewhere, the International Monetary Fund said the Bank of England and central banks must ensure that efforts to stimulate economies do not encourage “excessive risk-taking and a build-up of vulnerabilities” in the financial system.