ONS says public sector borrowing estimated at £31.7bn in April
Borrowing by the UK government exceeded economists’ expectations in April, as pandemic-induced restrictions caused high pubic spending and reduced tax income.
Data released by the Office for National Statistics on Tuesday showed that public sector borrowing was estimated at £31.7bn in April.
This figure is the second highest seen during April since borrowing records were first recorded back in 1993. However, it remains below the £47.3bn seen during the same month in 2020.
It came in higher than the £30.9bn forecast by economists, although it was well estimates from the Office for Budget Responsibility of £39bn.
The ONS also confirmed that the central government spent around £96bn in April, including the continuation of the furlough scheme.
Paul Craig, portfolio manager at Quilter Investors, commented on the UK government borrowing figures and what it means going forward.
“The Treasury will be wishing it could return to the role of the “invisible hand” but in reality public borrowing is going to be noticeable for a number of years. The level of borrowing remains severely elevated and will continue to do so while government support remains in place throughout the year. The role of the Treasury will evolve however as the vaccine programme gets nearer to offering everyone their first jab, and we will move from keeping the economy alive to ‘building back better’,” said Craig.
“But even so, the scale of this borrowing is vast. Even with welcome improvements in the government’s finances and the unlocking of the economy ongoing, government borrowing for the last year is still equivalent to 14.3% of GDP.”
“However, perversely, this is good economically and leaves the UK in somewhat of a sweet spot. Conditions are in place to jump start nicely and we are seeing this in the data that is feeding through. All sectors have been surprising to the upside and we are seeing strong job advert figures. The government will be hoping this will lead to an economic boom in the summer.”
