The government says it is aiming to borrow £180bn over the next three months alone as it moves to cover the coronavirus crisis cost burden.
In a statement, the Treasury said sales of gilts – packages of fixed-term government debt – would surge from next month based on an assessment of its financing requirements.
It said: “The government has announced an unprecedented package of measures to provide the critical support needed by individuals, families and businesses, through the economic disruption caused by COVID-19.
“This support, and the economic impact of COVID-19, will necessarily increase the government’s financing requirement compared to that set out at Budget 2020.
“The Chancellor has already outlined this will be fully funded through the government’s normal debt management operations.”
It was forecast at the time of Rishi Sunak’s first Budget, as the coronavirus pandemic gathered pace in March, that borrowing was expected to leap by £100bn over the lifetime of the current parliament – to 2024.
He announced £12bn worth of COVID-19 measures at that time, which were not included in that borrowing forecast, with the total package of support for the economy under lockdown since ballooning to cover things like the Job Retention Scheme for furloughed workers.
Independent forecaster, the Office for Budget Responsibility, warned last week that the budget deficit could surge to £273bn this financial year – 14% of GDP.
That would represent the largest annual sum since World War Two.
It signals a massive challenge ahead for the government to claw back cash at a time when it is also, currently, determined to press ahead with its election agenda of “levelling up” UK regions.
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There was more evidence, if needed, of the scale of the task ahead shortly before the Treasury’s announcement.
The Office for National Statistics (ONS) released figures showing that borrowing over the last financial year had overshot forecasts by £1.3bn.
It reported a deficit of £48.7bn for the 2019/20 period – £9.3bn more than in the previous year.
The start of COVID-19’s impact could be seen in the figures for March alone which showed borrowing surge to its highest level for the month since 2016, coming in at £3.1bn.
The ONS placed a big health warning on the figures, saying that it was likely they would be revised sharply upwards when more details became available.