Tory borrowing breaks all records

Youth at a protest against a Tory austerity budget

GOVERNMENT borrowing broke all records soaring to historic heights in November, figures released yesterday show.

The Office for National Statistics (ONS) said borrowing hit £31.6bn last month, the highest November figure on record.

It was also the third-highest figure in any month since records began in 1993.

Since the beginning of the financial year, borrowing to cover the gap between spending and revenues has reached £240.9bn, £188.6bn more than a year ago.

The independent Office for Budget Responsibility (OBR) has estimated that the amount could reach £372.2bn by the end of the financial year in March 2021.

The increase in borrowing has led to a steep increase in the national debt, which now stands at just under £2.1 trillion.

The UK’s overall debt has now reached 99.5% of gross domestic product (GDP) a level not seen since the early 1960s.

The latest figures highlight the scale of the problems facing Chancellor Rishi Sunak as he prepares to unveil his Budget on 3rd March next year.

A Budget had been expected to take place in autumn this year, but it was scrapped because of the pandemic.

The Treasury will be seeking to bolster public finances after the huge rise in spending to fight coronavirus.

The government borrows in the financial markets, by selling bonds.

A bond is a promise to make payments to whoever holds it on certain dates. There is a large payment on the final date – in effect, the repayment.

The buyers of these bonds, or ‘gilts’, are mainly financial institutions, like pension funds, investment funds, banks and insurance companies. Private savers also buy some.

The Chancellor has already imposed a pay freeze on at least 1.3 million public sector workers.