Worst week ever for UK economy as deficit soars and retail sales collapse

The Office for National Statistics data showed comfortably the highest borrowing on record stretching back to January 1993 as the Government moved towards wartime levels of spending to tackle the outbreak.

Britain’s national debt has also jumped £118.4bn or 17pc in a single year to £1.9 trillion, its biggest yearly increase on record. 

It means debts could soon reach more than 100pc of GDP, a level last seen in the early 1960s.

The surge will further embolden hawks in the Treasury who are pushing for a new round of austerity and brutal tax rises, despite fears this could rapidly derail any recovery.

Pablo Shah, of the Centre for Economics and Business Research, said: “The value of public sector debt is on track to become larger than the size of the economy in 2020. The debt to GDP ratio is likely to fall relatively swiftly in subsequent years, as the UK gradually builds back up its productive capacity.

“Nonetheless, it will settle at a level far above where it was prior to the coronavirus crisis, at which point the government will have to confront the trade-off between meeting its election pledges to scale up investment or focusing on addressing the newly expanded debt burden.”

​The cost of the furlough scheme – treated as an employer subsidy by the ONS – has come to £21bn so far over April and March.

Mr Sunak hopes the cost of the scheme will start to come down as parts of the economy reopen and workers can go back to factories, building sites and offices.

From August employers will have to pick up a slice of the cost of the furlough programme, which pays workers up to £2,500 per month.

Source Article