UK borrowing at record high as coronavirus cost soars in May

Government borrowing surged to £55.2 billion in May after heavy spending to ease the coronavirus crisis.

The figures come as April’s deficit was revised down £14 billion to £48.5 billion, but it still means Britain is on course for a record increase in borrowing this financial year - reaching the highest level as a share of the economy since World War Two.

The ONS believes that borrowing in the current financial year will come in at £298.4 billion, around five times the amount borrowed last year.

Borrowing could hit £298.4 billion this year

The ONS stats show debt at the end of May was 100.9% of GDP, the first time that debt as a percentage of GDP has exceeded 100% since 1963.

The figures also revealed the soaring cost of financial support, such as furlough schemes.

Debt as a proportion to GDP has increased considerably

Chancellor Rishi Sunak’s job retention scheme is set to cost the government around £84 billion before it finishes in October. While there will also be hundreds of billions of pounds spent on measures including business support loans and relief on business rates for retailers.

The ONS said: "The coronavirus pandemic continues to have a significant impact on the UK public sector finances. These effects arise from both the introduction of public health measures and from new government policies to support businesses and individuals."

A major problem for the government is tax receipts are down as businesses struggle through the coronavirus pandemic. Central government receipts fell by 28.4% compared with the same period last year to £40.7 billion.