With Central government spending surging to 57% and revenue plunged to 27%, Britain posted a record Budget deficit in April with the government’s unprecedented measures to prevent the economy from collapsing amidst crisis due to the virus.
With a budget deficit at 62.1 billion pounds last month, this is at a record since 1993, over 50 billion pound more than April 2019 and to emphasise equal to the total borrowing from the previous fiscal year.
Since modern records began in 1993 the monthly deficit is the most now and over 50 billion pounds more than April 2019. Even during the previous financial crisis, monthly borrowing never exceeded 22 billion pounds.
Currently borrowing costs are at lowest in the economy and the government is getting into mounting pressure to not return to the era of austerity. With net debt prediction to rise beyond 110% of GDP by September, it is a question of debate of how Britain should repay the bill.
With the country on path of moving to the deepest recession since 1700s, where before crisis borrowing was predicted at 55bn pounds for the current fiscal year- The office for Budget is now foreseeing a shortfall of over 300 billion pounds which is almost 15% of GDP.