The coronavirus pandemic has led to a serious economic fallout as the government had to give financial support to several sectors to sustain the economy.
Official figures have shown that in the month of August, the government of the UK borrowed £35.9 billion to tackle deficits in different sectors of the economy. The figures revealed that there has been a substantial difference between spending and tax income.
In August, the difference between the government`s spending and tax income was £30.5 billion more than the amount it borrowed in the same period last year. The borrowing figure for August is highest ever recorded since 1993.
Figures have also shown that the total amount of borrowing between April and August was £173.7 billion which is also a record increase. The amount of UK debt in July passed £2 trillion as the government spent billions to finance programmes and schemes to prevent the economy from falling behind due to the coronavirus pandemic.
In an effort to avoid an economic fallout, the government spend heavily on the furloughing workers across the country, the eat out to help out scheme, bailouts for rail firms and several other programmes to sustain the economy.
A UK economist at Capital Economics, Andrew Wishart, said borrowing increased significantly because the government of the UK absorbed “much of the cost of the Covid-19 crisis”. He added that “the big picture is that fiscal support will fade over the autumn causing many more job losses to be realised.”