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Thu, 24 September 2020

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Britain’s debt tops £2trillion for the first time ever as government borrows its way through coronavirus pandemic

Britain’s debt tops £2trillion for the first time ever as government borrows its way through coronavirus pandemic

Chancellor Rishi Sunak has unveiled a host of big-spending state measures to respond to the Covid-19 pandemic. (PA)

2 min read

Britain’s national debt has topped £2trillion for the first time as the Government borrowed billions to respond to the coronavirus pandemic, new figures show.

The latest public sector finance figures from the Office for National Statistics show that net debt stood at £2,004.0 billion at the end of July — £227.6 billion more than at the same point last year, and the first time it has exceeded £2tn.

The total amount the UK government owes to lenders now stands at 100.5% of the size of the entire economy as measured by GDP — the highest debt-to-GDP ratio since March 1961.

The stark figures highlight the scale of the UK Government’s response to the coronavirus pandemic, which has seen the state guarantee millions of peoples’ wages through the unprecedented Covid-19 furlough scheme, provide a rescue package to Transport for London, ramp up welfare spending and pump additional funding in the National Health Service.

The ONS data show that in July, the public sector spent more money that it received in taxes and other income, borrowing £26.7 billion in a month in which borrowing is traditionally low because self-assessed Income Tax is paid.

It is £28.3bn more than the UK borrowed in July 2019, and the ONS said it marked the “fourth highest borrowing in any month on record” since comparable figures first started being collected in 1993.

The figures show that borrowing in the first four months of the financial year — from April to July 2020 — stood at an estimated £150.5 billion.

That is £128.4 billion higher than in the same period last year and the ONS said it marked the highest borrowing in any April to July period on record.

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