By Tony Winterburn • 19 June 2020 • 12:26
UK Finance Minister Rishi Sunak is trying to manage spiraling debt in the UK. image credit : WINews
The Treasury has borrowed a staggering €115 billion in just two months to pay for the Covid-19 crisis, official figures confirmed today in more stark evidence of the fiscal mountain facing the UK. The €61.8 billion surge in May alone is nine times bigger than 12 months earlier and comes as deferred tax revenues and the estimated €67.2 billion cost of the jobs furlough scheme begins to mount up.
The country’s debt to GDP ratio – debt as a share of the size of the economy – has also soared above 100 per cent for the first time since 1963.
The UK’s debt pile of €2.18 trillion is up €175.2 or 20.5 per cent in a single year. The figure lays bare the cost of the Covid-19 crisis, with the Treasury getting less tax while spending cash on rescue efforts. The increase in borrowing came as central government receipts fell by 28.4 per cent compared with May 2019 to €45.5 billion, including €32.3 billion in taxes.
Value Added Tax (VAT), Pay As You Earn (PAYE) Income Tax and Corporation Tax receipts fell by 46 per cent, 29.4 per cent, and 14 per cent respectively, the ONS said, although officials said this could change.
NB the Pound to Euro rate was taken as 1.12 at the time of writing. TW.
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