Rolling coverage of the latest economic and financial news
- UK borrowed £24.3bn in May, down from £43.8bn in May 2020
- Second highest May borrowing on record
- Reopening of economy improving public finances
On today’s public finances, Chancellor of the Exchequer Rishi Sunak says:
“As we emerge from the pandemic, we are continuing to support people and businesses to get back on their feet and our Plan for Jobs is working.
“It’s also important over the medium term to get the public finances on a sustainable footing. That’s why at the Budget in March I set out the difficult but necessary steps we are taking to keep debt under control in the years to come.”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
UK government borrowing dropped last month, as the reopening of the economy helped to improve the public finances, with more firms reopening and people returning to work.
The UK public sector borrowed (PSNB ex) £24.3 bn in May, £19.4 bn less than in May 2020 but still £18.9 bn more than in May 2019. Borrowing makes up the shortfall between spending by the government and pub sector orgs and its income such as taxes. https://t.co/xDUNgifkZz pic.twitter.com/TgAAkqolDY
The reduction in spending from its peak at the start of the Covid-19 pandemic meant that government borrowing was down by £38bn in the first two months compared to last year, amounting to over a half of the improvement forecast by the OBR for the whole year.
“It should come as no surprise that borrowing has fared better than expected this year considering the improved economic outlook. We expect the deficit to fall to £211bn this fiscal year, undershooting the OBR’s forecast by around £23bn.
Borrowing last financial year was at its highest as a percentage of GDP since 1946, though it was higher during both World Wars https://t.co/wmF7QSA718 pic.twitter.com/Nad9fmmeeC
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