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Coronavirus takes heavy toll on UK finances

Published: (Updated: ) in European News by .

Chancellor Rishi Sunak confirmed a planned multi-year spending review will only cover one year.

LONDON — The United Kingdom’s public purse has been hit harder than expected by the pandemic, with figures released today showing net borrowing by the government at £208.5 billion between April and September, £174.5 billion more than the same period last year.

This was the largest amount on record, equivalent to 103.5 percent of gross domestic product, the Office for National Statistics said.

Experts at Capital Economics said the country is now likely to have a budget deficit of £390 billion for the year, amounting to 19.6 percent of gross output and exceeding official projections by £18 billion.

“Over time and as the economy recovers, the government will take the necessary steps to ensure the long-term health of the public finances,” Chancellor Rishi Sunak said in reaction to the numbers.

The resurgence of coronavirus infections in recent weeks led Sunak to scrap a planned multi-year spending review. Instead, a one-year review will be carried out to “focus entirely” on fighting the effects of the pandemic.

Inflation figures also out today showed consumer prices grew by 0.7 percent in September, which economists said opened the door for more central bank support in the form of bond-buying and potentially negative interest rates after that.

Source: POLITICO https://www.politico.eu/article/coronavirus-takes-heavy-toll-on-uk-finances/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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