UK public debt at 97.7% of GDP
Britain borrowed more money than at any point since World War Two as it attempted to deal with the damage caused by the coronavirus pandemic.
That is according to the Office for National Statistics (ONS), which said that the UK borrowed £303.1bn in the year ending in March. That is up from £57.1bn the year before, an increase of £246.1bn.
While the thee level of government borrowing was historically large, it was not as much as some anticipated it could be. Subsequently, the Treasury told financial markets on Friday morning that it would be issuing £43.3bn less debt in 2021/22 than initially planned, according to the Financial Times.
The budget deficit remains wide, however, as tax revenues plummeted and spending on health and furlough schemes rose due to the impact of the coronavirus pandemic.
Tax revenues fell while public spending on health services and furlough schemes surged.
Last year the UK government borrowed as much as 14.5% of GDP, an amount last surpassed after World War Two, when the UK borrowed 15.2% of everything produced in the economy.
The level of borrowing pushed the UK’s total accumulated public debt to 97.7% of GDP, the highest level since the early 1960s.
Michal Stelmach, senior economist at KPMG, said thee surge in debt was necessary to stave off further harm to the economy which could have resulted during the pandemic.
“Doing otherwise could have created long-lasting scars which would be far worse for fiscal sustainability,” he said.
