Public sector borrowing hits record highs

borrowing
The chancellor has said that government borrowing will fall in the next few years, despite his pledge to end austerity.

Public sector borrowing in the UK has hit record highs over the past year.

New figures from the Office of National Statistics (ONS) showed a £246bn increase in borrowing to £303.1bn.

Paul Johnson, director of the Institute for Fiscal Studies, said on the BBC’s Today programme:

“The big story in a sense is they [the borrowing figures] are £250bn more than a year ago.

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“And that, of course, is because of to some extent the recession of the last year but mostly because of the huge amount of additional government spending to support the economy over the last year.”

Public borrowing as a percentage of GDP hit its highest level since the second world war.

Michal Stelmach, senior economist at KPMG, said: “Rising debt is largely an unfortunate consequence of the government’s focus on shielding the economy as much as possible from the impact of Covid-19.

“However, doing otherwise could have created long-lasting scars which would be far worse for fiscal sustainability.”