The UK is coping with rising inflation!
Public borrowing in the UK was almost a fifth lower last month than a year earlier when the economy was still recovering from the coronavirus pandemic, but growing inflation pushed loan prices higher.
Borrowing – the difference between spending and tax receipts – was £22.8 billion in June, down £5.5 billion from the previous year, according to official figures.
The amount was, therefore, the second-highest for June in the history of records.
Borrowing has reached record levels, with billions of dollars spent on measures such as layoff payments.
Due to significant borrowing over the previous year, government debt has now increased to more than £2.2 trillion, or about 99.7% of GDP, a level not seen since the early 1960s.
Debt servicing expenses hit a new high of 8.7 billion pounds in June, according to the Office for National Statistics, which included an inflation increase in index-linked gilts’ future payback worth as well as real interest rates.
According to the ONS, the cost of measures to assist individuals and businesses mostly during epidemics increased the government’s annual expenditure by £204.3 billion to £942.7 billion last year.
Chancellor Rishi Sunak said he was “proud of the unprecedented package of support we put in place to protect jobs and help thousands of businesses survive the pandemic” in response to the recent numbers.
According to Ruth Gregory, a senior UK economist at Capital Economics, the government borrowed less in June than the Office for Budget Responsibility had predicted, which had predicted £25.2 billion.
Higher tax receipts and better GDP growth, she added, were more indicators that the solid economic revival was beginning to translate into decreased government borrowing
She did warn, though, that additional taxes were still on the way as Mr. Sunak attempted to reconcile the books following the pandemic’s expense.
Source: BBC News