United Kingdom: £2.004 billion of public debt

Among the effects caused by the lockdowns to stem the Coronavirus infections is the decisive increase in the public debt of all countries in the world. This took place to support government plans to support the economy brought to its knees by a shock that hit both the supply and demand sides.
If a few days ago it was announced that the Italian public debt had risen to a new record of 2,530.6 billion euros at the end of June, today the results that are anything but comforting from the English figure were announced. Recall that in the second quarter of 2020 the United Kingdom officially fell into recession after the collapse of the Gross Domestic Product of the 2nd quarter of 2020, which contracted by 20.4% after the 2.2% drop in the January-March 2020 period.

The British public debt for the first time in its glorious history exceeds 2,000 billion pounds. It is a truly alarming figure that denotes the impact that not only the Coronavirus, but also the breakup of the British with the European Union, has had on the UK economy.
According to what was released today by the British Office of National Statistics, the British public debt exceeded 2,000 billion pounds for the first time in history, reaching 2.004 billion. Compared to July 2019, the figure is higher by 230 billion pounds. The survey is historic in scope: the debt-to-GDP ratio rose to its highest level since 1961, reaching 100.5%, 20.4% more on an annual basis.

Loans also rose, which in the period April-July (the first 4 months of the new financial year) reached 150.5 billion pounds: this is a figure equal to about 3 times the loan from the Government during the whole previous financial year. It should also be noted that in the four-month period the cash requirement was 199.5 billion pounds more than what was recorded between 2009 and 2010, the year which, before the health emergency, held the record for this measurement.

Last July alone, public sector debt excluding banks reached £ 26.7 billion: in the same period of 2019 there was a surplus of almost £ 1.6 billion. During the month, the central government’s net borrowing requirement was £ 25.5 billion. Rishi Sunak, UK Finance Minister, said this measure requires putting UK public finances back on a sustainable level over time, which could require “tough decisions”. For the Office for Budget Responsability, the UK government will borrow over £ 370 billion in the full fiscal year 2020-2021.

By Domenico Greco

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