The short to mid-term prospects for the UK economy look bleak
As the UK economy is brought to a standstill by the new potent strain of the coronavirus – and a travel ban to the UK by more than 50 countries – government borrowing continues to go through the roof.
Tuesday, 22 December 2020 5:01 PM
According to the Office for National Statistics (ONS), government borrowing climbed to a staggering £31.6 billion last month, the highest November figure on record.
It was also the third-highest figure in any month since records began in 1993.
Since the beginning of the financial year in April – which coincided with the onset of the coronavirus pandemic – government borrowing has reached £240.9 billion, £188.6 billion more than a year ago, the ONS said.
Meanwhile, the independent Office for Budget Responsibility (OBR) has estimated that borrowing could reach £372.2 billion by the end of the financial year in March 2021.
The extremely high borrowing level has caused alarm amongst some of the country’s leading economists who are fearful of economic instability in the short to mid-term.Ncountry’s debt is, then we are at the highest levels since the 1960s”.
“In November alone, borrowing was about six times what it was in November last year, so these are some absolutely record numbers that we are seeing”, she added.
“Also, of course, the furlough scheme [designed to save jobs during the pandemic] has been extended, so that will increase government spending. We could well see the deficit for the financial year all the way up to 20% of GDP, so around £400bn”, Hewin concluded with a stark warning.
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