Government borrows record £127.9 billion between April and June
The period of April to June saw the UK government borrow a record £127.9 billion to finance mitigating the effects of Covid-19.
The figure was more than double the £55.4 billion that was borrowed in the entire 2019/20 tax year.
In June 2020, the government borrowed £35.5 billion, which was the third highest monthly borrowing figure since records began in 1993, but still less than the previous month after the reopening of some businesses saw a reduction in the numbers of furloughed workers and an increase in tax income.
Total government debt now stands at a record £1.98 trillion.
Speaking to the BBC, Institute for Fiscal Studies director, Paul Johnson, said that borrowing over the opening three months of this financial year would constitute “the most we would have borrowed over a quarter”.
Johnson said: "It is more than double over this first quarter than we were expecting to borrow over the entire year and we'll be looking to borrow a lot more as a fraction of the size of the economy over this year than we did during the financial crisis.
"Probably something around 15 per cent of national income, maybe a bit more, which is easily the most we've ever borrowed in a year outside of the first and second world wars."
The Office for National Statistics said that debt at the end of June 2020 as a percentage of the UK’s economic output stood at 99.6 per cent, the highest debt to GDP ratio recorded since March 1961.
However, these figures are subject to change amid the levels of uncertainty. The ONS has already scaled down May’s borrowing figure by £9.8 billion [to £45.5 billion] after tax receipts and National Insurance contributions raised more than previously thought.
Chancellor Rishi Sunak said: "It's clear that coronavirus has had a significant impact on our public finances, but we know without our response things would have been far worse.
"The best approach to ensure our public finances are sustainable in the medium-term is to minimise the economic scarring caused by the pandemic.
"I am also clear that, over the medium-term, we must, and we will, put our public finances back on a sustainable footing."
Thomas Pugh, a UK economics expert from Capital Economics, said that although borrowing began to show signs of falling in June, it continues to rise at an exceptional rate.
Pugh added: “We suspect that a slowdown in the recovery and further rise in unemployment later this year will prompt the government to announce additional fiscal spending at the next Budget”.