UK budget deficit could reach £ 400bn in current fiscal year

The UK budget deficit could reach £ 400 billion in the current fiscal year ending in March 2021, writes the Financial Times.
According to the UK’s National Statistical Office (ONS), the government needed to borrow 221.2 billion pounds in the first 5 months of the 2020-2021 fiscal year.

The government’s net need for cash during the coronavirus pandemic is 11 times the highest recorded so far in the fiscal year since the count began 36 years ago.

This was the result of government measures to support households and businesses, rising government spending to combat the impact of COVID-19 and a sharp decline in tax revenues, the FT notes.

Tax receipts to the country’s budget in August amounted to 37.3 billion pounds, down 7.5 billion pounds from the same month last year, according to data from ONS.

Government spending hit 78.5 billion pounds last month, up 19.5 billion pounds from August 2019.

UK public sector net borrowing rose to £ 35.92bn in August, up £ 30.5bn from the same month a year earlier. In April-August, the figure rose to 173.7 billion pounds.

UK Treasury Secretary Rishi Sunak on Thursday unveiled a jobs support scheme that allows for fewer hours of work instead of reductions, amid rising COVID-19 infections that could threaten a “fragile economic recovery.”

The scheme provides for the payment of salaries to employees of companies who will work at least a third of their standard working day. It will start operating in November and will last 6 months.

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