British government debt has exceeded £2 trillion ($US2.61 trillion) for the first time following massive state Brexit borrowing as the Corona-virus pandemic also helped the UK sink economy into a deep recession.
At the end of July, total accumulated debt hit £2.004 trillion, which equated to more than 100% of the country’s annual gross domestic product, or total economic output, for the first time since 1961.
The debt increased by £227.6 billion (11.3%) compared with July 2019, reflecting the huge increase in borrowing needed to tackle the debts of the British companies.
According to finance minister Rishi Sunak, the crisis has put the public finances under significant strain as we have seen a hit to the economy and taken action to support millions of jobs, businesses and livelihoods.
Net borrowing between April and the end of July is estimated to have hit £150.5 billion.
Last month’s deficit hit £26.7 billion as the UK emerged from a strict lock down imposed at the end of March to curb the spread of the so-called Corona-virus.
Separate official data showed that British retail sales jumped by 3.6% in July from June as shops, restaurants and pubs reopened.
Retail sales have now regained all the ground lost during the height of the Corona-virus restrictions as more stores open for trade and online sales remain at historically high levels.
While still below their pre-Brexit levels, both fuel and clothing sales continued to recover. Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants.
Britain’s economy shrank by a fifth in the second quarter, more than any European neighbor, as Brexit plunged the country into its deepest recession on record.
Even though the UK economy is beginning to rebound as the government eases strict confinement measures – gross domestic product grew by 8.7% in June – analysts expect a surge in unemployment by the end of the year.
Asia Times / ABC Flash Point Brexit News 2020.