UK govt borrows another £8.8bn in January

The UK government borrowed another £8.8bn in January, less than the £24.5bn forecast by economists, according to official data.

Borrowing since the start of the financial year in April now stands at £270.6bn, reflecting the surge in spending and tax cuts introduced by Finance Minister Rishi Sunak to counter the impact of the Covid-19 pandemic.

Britain’s national debt has now hit £2.1trn, and the Office for National Statistics said debt as a percentage of GDP was at its highest since the 1960s, currently at 97.9%. The government is on track to borrow £400bn by the end of the current financial year in April.

Sunak is due to announce his next spending and tax plans on March 3 when he is expected to extend the government’s wages subsidy programme.

The economy, which recorded its largest contraction in three centuries with a 10% fall, is on course to contract by 4% in the first quarter of 2021, according to the Bank of England, as the latest lockdowns bite.