HomeNewsLatest NewsUK Government borrowing Rises To Record High Of £55bn In May

UK Government borrowing Rises To Record High Of £55bn In May

The chancellor added: “We’ve set out our plan to do this in a gradual and safe fashion, including reopening high streets across the country this week, as we kickstart our economic recovery.”

UK government borrowing has currently reached a monthly rate of £55.2bn in May, that’s almost nine times higher than it borrowed in the same month a year ago, according to the Office for National Statistics (ONS).

This shows that borrowing has grown to a record £103.7bn in the financial year to date – £87bn more than the same time last year and the highest in any annual period since current records began in 1993.

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While reacting to the figures, Chancellor Rishi Sunak pointed to government’s efforts to “safely reopen our economy” from the coronavirus lockdown – which he said would help “restore our public finances to a more sustainable footing”.

Similarly, the ONS said the latest borrowing figures revealed UK government debt as a percentage of gross domestic product (GDP) has exceeded 100 per cent for the first time since 1963.

Debt levels at the end of May were 100.9 per cent of GDP, standing at £1.95 trillion, up by a fifth, or £173.2bn, on the same period in 2019.

The latest borrowing figure is slightly lower than the record £62.1bn of borrowing originally announced for April – but the ONS revised down April’s figure by £13.6bn to £48.5bn on Friday.

The Treasury received more from taxes and national insurance and spent less on the coronavirus job retention scheme than previously thought it would spend.

“Today’s figures confirm that coronavirus is having a severe impact on our public finances,” said Mr Sunak. “The best way to restore our public finances to a more sustainable footing is to safely reopen our economy so people can return to work.”

The chancellor added: “We’ve set out our plan to do this in a gradual and safe fashion, including reopening high streets across the country this week, as we kickstart our economic recovery.”

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Alex Tuckett, the senior economist at PwC, said: “In the near term, there are signs the economy is recovering as the country reopens, and this should boost tax receipts.

“However, these figures remind us that chancellor Rishi Sunak faces a difficult backdrop to any summer fiscal event, at which he will want to look for ways to help the recovery gather momentum.”

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