UK’s annual debt soars over pandemic measures
EMERGENCY pandemic support measures sent UK annual borrowing rocketing to the highest level since the second World War, official data showed last Friday (23).
Public sector net borrowing – the state’s preferred measure of the deficit – ballooned to a record £303.1 billion in the year to March, the Office for National Statistics said in a statement. And it was equivalent to 14.5 per cent of gross domestic product (GDP) – the highest proportion since 1946 when it stood at 15.2 per cent.
Borrowing sky-rocketed in the 20202021 financial year as the government rushed to cushion the economic blow of Covid. It contrasted sharply with borrowing of just £57.1bn in 2019-2020.
“The coronavirus pandemic has had a substantial impact on the economy and subsequently on public sector borrowing and debt,” the ONS said.
In March alone, borrowing hit £28bn as taxation receipts and national insurance contributions tumbled.
Total state debt now stands at £2.141 trillion or 97.7 per cent of GDP – the biggest proportion since the early 1960s. Britain is one of the hardest hit countries in the world by the coronavirus pandemic, with a death toll at present of 127,345 people.
Prime minister Boris Johnson’s government has spent £352 bn in emergency measures, particularly for a furlough scheme that has paid the lion’s share of private sector wages for millions of Britons.
In a separate release, the ONS revealed that long-suffering British retailers experienced an improving picture last month ahead of the partial lifting of virus restrictions.
Johnson’s administration is targeting a phased reopening on the back of a successful vaccine drive, with non-essential retailers reopening for business earlier this month. Retail sales by volume rose 5.4 per cent in March from February, the ONS said.
Sales had also risen in February after slumping in January on the back of England’s third round of virus curbs.
The ONS added last Friday that overall sales are currently 1.6 per cent higher than their pre-pandemic level in February 2020.