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UK govt borrowing soars further on virus support

LONDON, United Kingdom, Jan 22 – UK government borrowing soared further in December on emergency action to support the British economy battered by the coronavirus pandemic, official data showed Friday.

Borrowing last month hit £34.1 billion ($46.6 billion, 38.4 billion euros), a record for December, the Office for National Statistics (ONS) said in a statement.

Separate data showed British retail sales edged up 0.3 percent in December from November.

The ONS noted that state borrowing by Prime Minister Boris Johnson’s government had reached £271 billion in the nine months through to the end of December — an increase of £213 billion compared with the same year-earlier period.

Britain entered a first lockdown in late March, which lasted until around the middle of June, hitting the economy hard.

The latest figures mean that total  public debt officially stands at 99.4 percent of gross domestic product, the highest level in decades.

A vast chunk of the outlay has been to keep millions of private-sector workers in jobs via the government’s furlough scheme, with the bulk of wages to be paid until the end of April.

“Since the start of the pandemic we’ve invested over £280 billion to protect jobs and livelihoods across the UK, and support our economy and public services,” finance minister Rishi Sunak said in response to Friday’s data.

“This has clearly been the fiscally responsible thing to do. But, as I’ve said before, once our economy begins to recover, we should look to return the public finances to a more sustainable footing.”

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Reports suggest Sunak wants to begin removing support to coincide with his budget in March, despite the UK finding itself once more in lockdown, with bricks-and-mortar retail shut and children learning from home.

With the virus shutting businesses both permanently and until the latest lockdown is lifted, the government has also seen tax receipts slump by almost £40 billion in the nine months to December period.

This has contributed to public sector net debt reaching £2.13 trillion.

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