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UK borrowing will drop to £ 31.7 billion in April as the cost of Covid-19 remains high.business

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UK borrowing reached its second highest level in April as the costs of working on the Covid-19 pandemic and protecting the economy continue to rise.

Net public sector borrowing was estimated at £ 31.7 billion last month, according to figures released by the National Bureau of Statistics this morning.That’s £ 15.6bn Less More than April 2020, when Britain borrowed about £ 47 billion in the first wave of the pandemic.

Borrowings in April since the monthly record began in 1993 due to ongoing medical costs in the fight against Covid-19, such as the NHS test and trace program and vaccine deployment, and schemes such as the temporary dismissal program. Is still the second most common.

But in reality, it’s less than £ 39 billion that the UK was expecting to borrow last month in its March forecast.


UK Public Borrowing, 2021-2022 Photo: ONS

Borrowing in April will bring UK government bonds up to £ 2.171 trillion. This is about 98.5% of GDP, the highest ratio since 99.5% recorded in March 1962.

British national dent

British State Dent Photo: ONS

But ….. ONS also lowered its borrowing estimates for the last fiscal year. Currently, we estimate net public sector borrowing (PSNB ex) for the fiscal year ending March 2021 to be £ 300.3 billion.

That’s £ 2.8 billion less than last month’s estimate, but it’s still a record total for the year.

Fraser Manro
(@Fraser_ONS_PSF)

£ 300.3 billion in borrowings (PSNB ex) in 2020/21 was almost double that of 2009/10, the height of the financial crisis. Borrowing makes up for the shortfall between government and other public sector spending and income such as taxes. https://t.co/3DPNoEVF87 pic.twitter.com/hLI0Bu6C9h


May 25, 2021

This is calculated at 14.3% of the UK’s Gross Domestic Product (GDP). This is the highest value since World War II.

Fraser Manro
(@Fraser_ONS_PSF)

UK borrowing (PSNB ex) was 14.3% of GDP in 2020/21, down 0.2 points from the initial estimate last month, but still the highest borrowing-to-GDP ratio since the end of World War II (1945). 15.2% at / 46) https://t.co/Cm0uyA1Su2 pic.twitter.com/NUptfvx3Ak


May 25, 2021

UK borrowing costs are still low. The 10-year bond is trading at a yield of about 0.8% or an annual interest rate this morning. And many economists argue that when the economy returns to growth (lowering the debt / GDP ratio), this debt becomes manageable.

ONS estimates that central government revenues were £ 58 billion last month, an increase of £ 3.8 billion compared to April 2020, and central government agencies spent £ 95.9 billion, a decrease of £ 12.9 billion year-on-year. I will.

Current spending (excluding investment and asset depreciation) is £ 83.9bn, about 15% less than it was a year ago.

On the spending side, ONS said:

The central government sector spent £ 31 billion on goods and services in April 2021. This includes £ 16.8bn in funding and £ 12.8bn in payments.


This cost includes spending by the Department of Health and Social Care (DHSC), delegated government agencies, and other departments for coronavirus pandemics, such as NHS Test and Trace program and vaccine costs.

The central government subsidized businesses and households in April 2021 by £ 7.5 billion, £ 5.9 billion less than in April 2020. These payments included the cost of a job performance plan.


In April, the government raised £ 3 billion Coronavirus Job Retention Scheme (CJRS) And £ 2.5 billion Self-employed income support system (SEISS)..

Details and reactions to follow ….

agenda

  • 9am BST: May Ifo Survey on Germany’s Business Environment
  • 9:30 am BST: ONS Report on the Impact of Coronavirus and Brexit on UK Trade
  • 10.30am BST: Secretary of State Kwasi Kwaten, hearing of the BEIS Commission on the UK Steel Industry
  • 11am BST: UK Retailer CBI Monthly Survey (Distribution Transactions)
  • 2pm BTS: March US Home Price Index
  • 3:00 pm BST: May US Consumer Confidence Report



UK borrowing will drop to £ 31.7 billion in April as the cost of Covid-19 remains high.business

Source link UK borrowing will drop to £ 31.7 billion in April as the cost of Covid-19 remains high.business

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