Government Borrowed £19 Billion in February, Pushing National Debt Up to £2.13 Trillion
The Government borrowed £19.1 billion in February, the highest since comparable records began in 1993. Serious measures are needed to flatten the UK’s growing mountain of debt, but the Government hopes to stop short of introducing another period of “austerity”. The Mail has the story.
Rishi Sunak renewed his vow to balance the books today as the Government broke another borrowing record.
The £19.1 billion figure for last month was the highest February figure since comparable records began in 1993.
It means that net debt has risen by £333 billion since coronavirus chaos kicked in last April, with the UK’s debt mountain reaching £2.131 trillion – equivalent to 97.5% of GDP.
Responding to the ONS figures, the Chancellor said: “Coronavirus has caused one of the largest economic shocks this country has ever faced, which is why we responded with our £352 billion package of support to protect lives and livelihoods.
“This was the fiscally responsible thing to do and the best way to support the public finances in the medium-term.
“But I have always said that we should look to return the public finances to a more sustainable path once the economy has recovered and at the Budget I set out how we will begin to do just that, providing families and businesses with certainty.” …
Rather than go ahead with another period of “austerity” – which Boris Johnson has already ruled out – it is more likely that tax rises and borrowing would increase instead to make up the shortfall, the Institute for Fiscal Studies has said.
The UK’s tax burden is already set to hit the highest level since the 1960s as Mr Sunak raises billions by dragging more people into higher income tax rates and increasing rates for businesses.
The relationship between the stringency of lockdowns and the level of economic suffering is well established, as is highlighted here.
Worth reading in full.
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I feel sorry for Rishi Sunak. The worst Chancellor of the Exchequer in the history of the country. It’s sort of not his fault – but he is in government, the buck stops with him and he could have resigned if he didn’t agree with it.
although I can’t forgive his lying
Responding to the ONS figures, the Chancellor said: “Coronavirus has caused one of the largest economic shocks this country has ever faced, which is why we responded with our £352 billion package of support to protect lives and livelihoods.
The economic shock was caused by the lockdown, not the virus
“Serious measures are needed to flatten the UK’s growing mountain of debt”
There is no need for any such thing.
It’s basic sectoral accounting. People have saved a lot, which causes a deficit. When they spend those savings that causes a spending chain that generates the matching taxation.
The debt will persist for as long as the saving persists because they are two sides of the same coin. You can’t have one without the other.
It’s all very simple once you get beyond the idea that there is a fixed amount of money.
Why does this myth persists after a year of evidence that it is wrong, a decade of QE and decades of evidence across the wider world that this isn’t how it works? Japan has been going to collapse since the late 1980s and it still hasn’t. Why? Because the collapse belief is wrong. Completely wrong.
There’s a presentation here on how UK government financing actually works. https://www.youtube.com/watch?v=7JJJcB3X3ag
For anybody who wants to understand how things are.
The Japanese economy has been stagnant since the late 1980s.
It’s all very simple once you get beyond the idea that there is a fixed amount of money.
But there’s isn’t a fixed amount of money, or at least wealth.
For a year now we’ve been consuming at a slightly reduced rate, but producing at a highly reduced rate. The ration of production to consumption has gone down, dramatically
That way lies poverty.
I’d add to Lucan’s comment – and put simply: Almost all of this money has been ‘borrowed’ from the Bank of England, an entity wholly owned by the UK Government, who essentially just created it on a spreadsheet.- why should this ever need to be ‘repaid’?
Inflation, for one thing.
interesting charting from ONS
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/articles/comparisonsofallcausemortalitybetweeneuropeancountriesandregions/januarytojune2020
go to section 5
compare England against Serbia
Serbia had a higher mortality in winter of 2016/2017 than England in spring 2020
Bulgaria has a higher winter mortality than England did in spring 2020 every year!
Happy days, the Covidian’s, Lockdown Zealots, Wealthy and young people are going to be paying for this meltdown over the next 20…. 30 years with their taxes. I don’t think they are going happy with this.
Its all rescuable – its a year of utter stupidity but that’s what gallows are for. Its what we do from here that counts. Lockdown every winter? Lockdown every 5 years (go early, go hard) when there is a hint of anything new anywhere? Go back to normal? Resurrect the pandemic response plan from the bin and carve it in stone?
Don’t kid yourselves that this is not one of the most important parts of the puzzle here. The course of events from this point on will effectively be a controlled demolition of the economy; mass unemployment accompanied by hyperinflation, a ‘necessary’ move on from furlough to UBI for large swathes of the now non-working population, followed by an eventual currency collapse. All are not obviously linked but once you can see it you know this is the plan. Once everyone is trapped into the vaccine / green digital pass nonsense then with the currency collapse and a move to crypto-money you’ve lost your lives and any control you may have throught you had on what you can do and what happens next. You will be controlled by an app, your money (income or UBI) will be in the form of crypto-credits that can be cancelled or taken away without notice, subject to your full conformance with the government rules. This is not a joke. This is their plan.