UK public borrowing falls as furlough scheme comes to an end


UK public borrowing fell in November as the end of the job retention scheme helped to cut public spending, despite rising costs from the vaccination programme and higher debt interest payments.

Public sector net borrowing was estimated to have been £17.4bn last month, £4.9bn less than in November 2020 when most of the country was under tight restrictions, data from the Office for National Statistics showed on Tuesday.

However, this was higher than the £16bn forecast by economists polled by Reuters.

Borrowing fell because central government bodies spent £76.6bn, down £5.7bn from the same month last year, reflecting savings from the job retention scheme which ended in October.

At the same time, central government receipts were £61.1bn last month, up £2.5bn compared with November 2020 as stronger economic activity boosted tax revenues.

This was before the Omicron coronavirus variant started to spread in December, hitting confidence and activity.

The lower cost of pandemic-related support schemes was partially offset by a sharp rise in debt interest payments due to higher retail price inflation to which index-linked gilts are pegged, as well as higher spending on procurement which includes the cost of the vaccination programme.

Despite the reduction, this was still the was the second-highest November borrowing since monthly records began in 1993. It boosted public debt — borrowing accumulated over time — to about 96 per cent of gross domestic product, a level not seen since the early 1960s.

Column chart of Fiscal years ending in March, % of GDP showing UK public sector debt has reached levels last seen in the early 1960s

Source link


Please enter your comment!
Please enter your name here