News

News | Published May 15 2020

Annual borrowing to equal 15.2 per cent of the economy, OBR says

The Office for Budget Responsibility [OBR] has forecast annual borrowing to equal 15.2 per cent of the UK economy, after the cost of the government’s Covid-19 response rose to £123.2 billion.

It is an increase on the OBR’s previous estimate of Covid-19 government costs, which stood at £103.7 billion.

The OBR’s most recent official projection, made following Rishi Sunak’s March 11 Budget, estimated that annual borrowing would hit £55 billion.

The new forecast borrowing percentage against the economy would be the highest seen since the end of the Second World War, when 22.1 per cent of the value of the economy was borrowed.

The additional spending has also pushed the 2020/21 deficit over the 15 per cent recorded in 1945/46.

The total amount of annual borrowing is predicted to hit £298 billion.

The costs of extending the Job Retention Scheme until July has been a main driver, while an additional £20 billion could go on top of that depending on the details of its extension to October.

Meanwhile, an additional £1 billion has been factored in due to increased welfare, with Universal Credit claims up since the pandemic began.


Related Stories

Authored by

Alexander Bridge-Wilkinson
Junior Editor
@
May 15 2020

Featured Organisations

Skipton Properties

Based in Cross Hills, West Yorkshire, Skipton Properties are a housing developer with a number of distinctive qualities. Skipton Properties treat each... Read more

Speed One Sports

Established in 2002, Speed One Sports is “the name making the noise”. The company provides sports clothing and equipment to private and professional s... Read more

David C Rivett Family Funeral Directors

Although Yeovil-based David C Rivett Family Funeral Directors has been operating for 30 years, David Rivett’s involvement in the local funeral sector ... Read more

Latest News

Ministers open-minded about vaccine passports