Government borrowing record lb62bn in April to deal with coronavirus

Credit;PA

Government borrowing surged to lb62.1 billion to April – the greatest figure for just about any month on record – after heavy spending in the face of coronavirus, based on new figures.

The Office for National Statistics (ONS) said public sector borrowing – excluding banks of the state – was lb51.1 billion higher than the same month last year.

The figure is really a lot higher than analysts had predicted, with a consensus of economists predicting lb30.7 billion for that month.

However, it's slightly less than the lb66.6 billion estimate produced by work for Budget Responsibility (OBR) last month.

It comes after the Chancellor increased financial support for businesses and employees after vast areas of the economy were forced to halt because of the coronavirus lockdown.

A fall in tax receipts also significantly led to the increase in borrowing, with central government receipts sliding by 26.5% for that month compared to April 2021.

Rising unemployment

This was driven by a mixture of contracting economic activity, rising unemployment and weaker earnings, and regulations given to companies in reaction to the lockdown.

The ONS also cautioned that its first estimate of borrowing April could be significantly revised because the full impact of the outbreak becomes clearer.

Meanwhile, borrowing by the state in March 2021 has been revised up by lb11.7 billion to lb14.7 billion by the ONS.

It said it was driven by a reduction in previous estimates of tax receipts and National Insurance contributions.

As due to the jump in borrowing, public sector debt rose to lb1,887.6 billion at the end of April – lb118.4 billion higher than April 2021.

ONS

The ONS asserted the Government borrowed lb62.7 billion within the Twelve months to the end of March, representing a lb22.5 billion rise around the previous year.

Last month, it jumped lb9.3 billion to a higher-than-forecast lb48.7 billion in the financial year to March 31.

Charlie McCurdy, a researcher at the Resolution Foundation, said: “The latest borrowing figures provide a stark illustration of the fiscal costs of coronavirus and also the lockdown measures necessary to contain it, using the Government borrowing just as much recently because it throughout the whole of last year.

“But while there is significant pressure on the public finances, there aren't any signs that the Government is struggling to find the money.

“Record low interest rates mean the UK's higher debt burden should remain more than manageable.”