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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.
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.
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.
This is calculated at 14.3% of the UK’s Gross Domestic Product (GDP). This is the highest value since World War II.
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.
Details and reactions to follow ….
- 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