A combination of coronavirus restrictions and government measures to support individuals and businesses, have taken a toll on UK public finances, with the country posting the largest year-on-year and monthly increase in borrowing.
The UK government’s borrowing last month was more extensive than in any other month in recent memory, as tax receipts dropped and public spending grew amid the COVID-19 pandemic.
The country’s budget deficit grew by $75.8 billion in April 2020, according to the Office for National Statistics. This is 17.7 percent more than in April 2019 and constitutes the biggest monthly increase since records began in 1993.
The national debt at the end of last month stood at roughly $2.3 trillion, or 97.7 percent of the GDP. It has jumped 17.4 percent since April 2019, marking the largest year-on-year increase in debt as a percentage of GDP on record.
The dramatic increase in borrowing is mainly due to the effects of the new coronavirus, which infected more than 250,000 people in the UK and has left more than 36,000 dead. The UK government has rolled out a number of fiscal measures to support businesses and individuals over the past two months.
Those included a nearly $250-billion quantitative easing programme by the Bank of England, a job retention scheme which could cost anywhere between $36 billion and £48 billion over the next few months, a discount of $11.8 billion in business rate relief, and a $1.6-billion rescue package for tech start-ups.
England and Northern Ireland have already begun easing the crippling lockdown, and Scotland is expected to enter the first phase of lifting restrictions next week. Wales has extended the lockdown until the end of May.