UK public debt grew to the size of the entire British economy in the first eight months of the financial year, the highest level since the early 1960s, as a result of the coronavirus pandemic.
The figure surged by a whopping £301.6 billion ($403.8 billion) from April to November, according to data released by the Office for National Statistics on Tuesday. This brought the national public sector net debt to £2.0998 trillion (around $2.8 trillion) at the end of last month, or nearly 99.5 percent of GDP.
As the pandemic plunged government revenues and sent spending soaring, UK public borrowing hit the highest level since records began in 1993. From April to November, it reached almost £241 billion, around £188 billion more than in April to November 2019. Last month alone, the government had to borrow a record £31.6 billion, up more than 40 percent compared to October, to fund its extended coronavirus job retention scheme.
Finance Minister Rishi Sunak signaled that the government is not going to take any action over the rising spending amid the crisis. “When our economy recovers, it’s right that we take the necessary steps to put the public finances on a more sustainable footing so we are able to respond to future crises in the way we have done this year,” he said.
The official earlier warned that public borrowing could surge to a peacetime record of £394 billion in the 2020-21 financial year due to the pandemic. However, those predictions were made long before Britain discovered a new strain of the virus and the already crippled economy faced the threat of an extended lockdown.
According to the latest data, the British economy started to recover in the third quarter, with the country’s GDP jumping by 16 percent. Even this impressive quarterly growth failed make up for the nearly 19-percent contraction in the previous quarter, while new restrictions could easily plunge the economy back into contraction territory.
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