Government borrowing fell last month – but hits second highest April on record as Covid support schemes continue
The level of government borrowing fell in April as the easing of lockdown restrictions started to regenerate the UK economy, according to new data.
Butlevelsofdebtremainhigh, withtheofficefornationalstatistics (ONS) revealing that borrowing hit £31.7 billion in April – the second highest April on record.
Public sector net borrowing was £15.6bn less than the same month a year ago, with central Governmentreceiptsat£58bn– up £3.8bn on April 2020.
Central government bodies spent £95.9bn – down £12.9bn on a year earlier.
The ONS also revised down its estimates for last year's total deficit, which hit levels not seen since the Second World War Two, from £303.1bn to £300.3bn – or 14.3% of gross domestic product (GDP).
This was £27.1bn less than the Office for Budget Responsibility's(obr)mostrecentforecasts as the economy starts to recover following the vaccine rollout andliftingofcovidrestrictions.
The amount of government debt now sits at £2.17 trillion at
the end of April 2021, or around 98.5 per cent of GDP, the highest ratio since the 99.5 per cent recordedinmarch1962.alarge proportion of the additional spending by government was generated from the various support schemes for businesses and workers during the Covid-19 pandemic – increasing day-to-day spending by £204.1bn to £942.7bn.
Tax and National Insurance contributions in the financial year to the end of March was down £32.7bn to £670bn, the ONS added.
Chancellor of the Exchequer Rishisunaksaid:"atthebudget, I set out the steps we are taking to keep the public finances on a sustainable footing by bringing debt under control over the medium term.
"But we also need to focus on driving a strong economy recovery from the pandemic. That is why the government is continuing a comprehensive packageofsupporttohelpbusinessesandworkersgetbackon their feet."
Isabel Stockton, research economist at the Institute for Fiscal Studies, pointed out that borrowing over the last 12 months is now falling rather than rising.
She added: "But at an estimated £32bn, April's borrowing wasstill£21bnabove–oralmost three times bigger – than the £11bn borrowed in April 2019.”