New figures released by the UK's statistics agency on Friday show the country has been borrowing record levels of money over the summer
ADVERTISEMENTNew figures published on Friday have made plain that Britain will borrow more money than it has in recorded memory to help keep its economy running through a winter of COVID-19.
The winter economy plan announced by Chancellor of the Exchequer Rishi Sunak, the UK's finance minister, included schemes to sustain jobs, businesses and the hospitality sector.
From November, the government will pay up to a third of some workers’ salaries, while more companies will be offered loans to keep them in business — and more time to pay the money back.
But officials admit many more people will lose their jobs and that will strain the country’s economy even further.
Plainly, Britain is spending more, earning less and borrowing more money to fill the gap.
But the sheer scale of that borrowing would, in normal times, be nothing short of bewildering.
The Office for National Statistics estimates the UK’s public sector net borrowing last month was €39.3 billion — the third-highest in any month since records began in 1993.
A year before in August 2019, borrowing was just €5.9 billion.
The UK has borrowed three times as much money in the first five months of this financial year than it did in the whole of the last one.
Part of this surge is to feed the gap created by falling income: receipts from the country’s biggest taxes on companies, salaries and sales are all sharply down.
It was for this reason that Sunak says he did not extend the UK’s furlough scheme, which was designed to pay people to stop working and stay at home during the early months of the coronavirus lockdown.
But tax income will fall yet further if more people stay out of work.
Sunak’s scheme to replace furlough, the job support scheme, will see the UK government pay part of employees’ salaries on condition that they return to work part-time.
It is a complicated scheme and many companies may decide that they would be better off dismissing the workers instead.
That would fuel Britain’s unemployment figures, which reached 1.4 million people in July, a rate of 4.1%.
Many analysts believe the total number of people out of work could exceed four million, a new national record.
For the British government, it is a delicate balancing act: on the one hand, it is still distributing vast sums of borrowed money; on the other, it wants to rejuvenate the economy in the hope that, one day, it can pay all that money back.