The UK fell £2 trillion into the red at the end of August as the Government fought to cope with the economic and health impact of coronavirus.
Official figures published on Friday show UK’s national debt soared to the new high amid predictions High Street jobs will be wiped out despite the Chancellor's new job support scheme.
The data from the Office for National Statistics showed borrowing up to 101.9 per cent of gross domestic product (GDP) after the public sector borrowed around £35.9 billion in August.
National debt passed £2 trillion for the first time in history in July as the Government threw billions at offsetting the economic chaos caused by the Covid-19 crisis.
The figures came in the wake of Chancellor Rishi Sunak admitting that his new job support scheme would not prevent mass unemployment and the .
boss of one of the UK’s most successful High Street chains predicted hundreds of thousands of traditional retail jobs may not survive the coronavirus crisis.
Lord Wolfson, who runs clothing firm Next, said there was a clear threat to thousands of jobs, which are now “unviable” because the lockdown has triggered a permanent shift to online shopping.
He said: “I wouldn’t want to underestimate the difficulty that is going to cause a lot of people who work in retail, I think it’s going to be very uncomfortable."
The comments reflected Sunak’s own grim picture of job losses at a post-announcement Downing Street press conference on Thursday.
He spoke as if mass unemployment was inevitable when he said: “Unemployment is already rising and will continue to rise - that’s a complete tragedy. We’ve already lost 700,000 jobs. Those people’s security is now under threat.”
Labour Shadow chancellor Anneliese Dodds said there is now a real question over whether the system of targeted wage support will incentivise employers to keep people on.
She told the BBC Today programme: “That’s the real kind of million-dollar question, because if it doesn’t, if it’s not actually designed in a way that will make it economically sensible for employers to keep people on, then unfortunately it won’t be living up to the promise of other wage support schemes that we’ve seen being so successful.”
Tory Steve Barclay MP, number two to Sunak as Chief secretary to the Treasury, defended the emergency measures from criticism there is not enough support for the hardest-hit industries like hospitality.
He told Sky News: “We’ve been honest with the public that we will not be able to save, regretfully, every job.”“There’s a whole range of investment going into the economy in those sectors whilst we protect as many of those jobs that are viable.
“It is right that we also look at the cost to the wider economy, these measures come at a significant fiscal cost, and that’s why it’s right we target those jobs that are viable during what is going to be sadly a difficult winter.”
