Public sector finances data out this morning shows the continuing impact of the Covid crisis with borrowing in first 6 months of the year the highest in any April to September period on record.
The figures show that debt has risen to 103.5% of GDP in September 2020, to reach £2,059.7 billion.
This is the highest debt to GDP ratio since the financial year ending 1960
The Office for Budget Responsibility predicted in August that borrowing would reach a record £372 billion pounds by the end of this financial year, equivalent to 18.9% of gross domestic product, the most since World War Two.
“The OBR’s forecast for public borrowing of 372 billion still looks about right,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
Ratings agency Moody’s downgraded Britain’s sovereign credit rating on Friday to the same level as Belgium’s and the Czech Republic’s, warning that Britain “effectively has no fiscal anchor”
However it seems that high fiscal costs of lockdown look to be manageable
The Treasury has raised over £243bn since mid-March and while debt might be going up, the costs of servicing that debt are still going down with interest rates at record lows
