UK Borrowing Drops By Almost 50% As Pandemic Spending Eases

The first eight months of the 2021/22 financial year saw UK public borrowing nearly halve compared with a year earlier when the Government’s emergency pandemic spending programme was in full swing.

Between April and November, borrowing dropped to £136 billion, down nearly £116 billion in the same period of 2020, according to data from the Office for National Statistics. 

However, the figure was still nearly three times its level two years before, prior to the coronavirus pandemic. The Chancellor of the Exchequer, Rishi Sunak, is currently under pressure to come up with new measures to support the hospitality sector which has been hit hard by the emergence of the Omicron variant of the virus. 

These data predate the recent surge in coronavirus infections caused by the Omicron variant, with a near-term tightening of virus restrictions once again a possibility,” said Bethany Beckett of Capital Economics.

Although the economy has got better at coping with restrictions with each new wave, we still suspect it would prompt a deterioration in the public finances via lower tax revenues and the potential reintroduction of government support schemes.”

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