London Daily

Focus on the big picture.
Sunday, Nov 01, 2026

COVID-19: Virus fight forces government borrowing to £303bn - highest level since records began

COVID-19: Virus fight forces government borrowing to £303bn - highest level since records began

The latest figures show the national debt has passed £2.1trn as the public finances reel from the cost of the pandemic response.

The demands of the coronavirus crisis on the public purse strings forced government borrowing to its highest annual sum on record, according to official figures.

The Office for National Statistics (ONS) reported net borrowing of £24.3bn in March - a month when the chancellor revealed a budget that pledged continued support for the public health effort and extended shields for the economy from continuing COVID-19 restrictions.

Figures showed that the latest sum took borrowing to £303.1bn in the 2020/21 financial year as a whole, representing 14.5% of GDP.

The ONS said it marked the highest annual total since 1947 - when comparable records began - though it came in well under the £355bn predicted just last month by the Office for Budget Responsibility (OBR).

The start of the financial year was dominated by the crisis as the UK had just entered its first pandemic lockdown, forcing many parts of the economy into a spring hibernation as the NHS grappled surging hospital admissions.

Chancellor Rishi Sunak was forced into 15 separate announcements during the period as a whole, with at least £280bn spent tackling the crisis.

The sum includes extra money for the health service, Test and Trace, vaccines and support schemes including the Job Retention Scheme, or furlough, along with loans and grants for businesses.

The furlough scheme has cost almost £60bn alone and was still supporting five million jobs earlier this month.

The ONS said the £303.1bn borrowing figure followed a deficit of £57bn in the previous financial year.


It meant that the country has net debt of £2.14trn - the highest proportion of GDP since the 1960s.

Mr Sunak used his last budget, in March, to signal that some targeted tax rises were on the way to help ease the deficit including a freeze in the personal income tax allowance.

But he said the emphasis would be on supporting growth in the economy as it looks to bounce back from 2020 that saw output plunge almost 10% - its worst performance in more than 300 years.

There are some encouraging early signs as the country emerges from its latest lockdown restrictions.

A closely-watched reading of activity in the manufacturing and powerhouse service sectors of the economy highlighted a deluge of new orders earlier this month.

The IHS Markit/CIPS preliminary "flash" composite purchasing managers' index rose to 60.0 in April from 56.4 in March, its highest reading since November 2013.

Any reading above 50 represents growth.

Separate ONS figures released on Friday showed retail sales rebounding strongly last month despite the fact many so-called non-essential retailers were unable to reopen their doors across much of the UK until 12 April.

Volumes rose 5.4% compared with February with fashion seeing the biggest leap of 17.5%.

The proportion of cash spent online fell as more people ventured out, the figures showed.

The data builds on the findings of surveys suggesting that services, construction and manufacturing are all gearing up to cash in on pent-up demand.

Newsletter

Related Articles

0:00
0:00
Close
Home Office Expands Border Security Operations and Intelligence Sharing With European Partners
Office for National Statistics Reports Modest Retail Sales Growth Ahead of Crucial Christmas Trading Season
Welsh Government Unveils Strategic Plan to Boost Regional Technology Innovation and Digital Skills Training
Department for Environment Food and Rural Affairs Implements New Agricultural Subsidies Framework for English Farmers
Scottish First Minister John Swinney Announces Major Regional Infrastructure and Green Energy Investment Strategy
National Health Service Leaders Warn of Severe Winter Pressures and Mounting Accident and Emergency Backlogs
Bank of England Monetary Policy Committee Signals Cautious Interest Rate Path Amid Persistent Services Inflation
Chancellor of the Exchequer Rachel Reeves Finalizes Autumn Budget Framework Aiming to Close Public Sector Fiscal Gap
Department for Science, Innovation and Technology Prepares Enhanced Artificial Intelligence Safety and Cyber Defense Frameworks
United Kingdom Government Expands International Sanctions Framework Against Russian Shadow Fleet and Financial Enablers
Institute of Directors Reports Sharp Post-Budget Drop in Business Confidence Despite Long-Term Investment Intention Shifts
Chancellor John Healey Defends Sweeping Fiscal Adjustments and Household Support Packages Following Autumn Budget
Parliamentary Petitions Committee Schedules Major Legislative Debates on Special Educational Needs and Non-Stun Meat Labelling
Regional Devolution and Good Growth Fund Frameworks Reshape Local Government Funding Across English Regions
Loughborough University Economic Analysts Highlight Substantial Uncertainty Surrounding Public Sector Efficiency Savings
British Legal Sector Drives Sixty Billion Pounds in Annual Economic Output While Employing Over Half a Million Professionals
Law Society Welcomes New Better Regulation Executive While Pressing for Long-Term Legal Aid Funding Reform
Metropolitan Police and Security Services Heighten Operations Across London Ahead of Large-Scale Public Demonstrations
Bank of England Economists Scrutinize Corporate Tax Adjustments and Public Sector Borrowing Pressures
Chancellor John Healey Defends Autumn Budget Tax and Spending Allocations Following Intense Parliamentary Scrutiny
Department for Environment, Food and Rural Affairs Implements Strict Water Quality Monitoring Rules Following Severe Rainfall and Flooding
Welsh Government Unveils Comprehensive Regional Housing Strategy to Address Rural Affordability and Homelessness Pressures in Cardiff
Office for National Statistics Reports Slowing Consumer Price Inflation and Steady Retail Performance Across United Kingdom Markets
Northern Ireland First Minister Michelle O'Neill and Deputy First Minister Emma Little-Pengelly Advance Cross-Border Infrastructure Agreement in Belfast
Competition and Markets Authority Launches Formal Investigation Into Artificial Intelligence Partnerships Involving Major Technology Corporations
Scottish First Minister John Swinney Secures Cross-Party Support for Devolved Budget Framework and Renewable Energy Expansion
High Court Rules in Favor of Environmental Campaigners Over Department for Energy Security and Net Zero Licensing Procedures
National Health Service England Announces Major Digital Modernization and Artificial Intelligence Diagnostic Rollout Across Regional Trusts
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Cuts Amid Persistent Wage Growth and Inflation Pressures
British Prime Minister Keir Starmer and Chancellor Rachel Reeves Outline Strategic Infrastructure Plans to Boost Regional Growth and Private Investment
Water pollution remains high despite £5bn investment
Regional Economic Divergence and Industrial Transformation
Technological Sovereignty and Regulatory Scrutiny
Fiscal Consolidation and Public Service Pressures
Automotive Industry Leadership Warns of Imminent Supply Chain Disruptions Following Recent European Trade Negotiations
High Court Delivers Landmark Ruling Affirming Strict Legal Protections for Corporate Data Privacy Against State Surveillance
Welsh First Minister Eluned Morgan Secures Additional Funding for Regional Transport Infrastructure and Rail Modernization
Scottish First Minister John Swinney Announces Major Green Energy Infrastructure Investment Package for Aberdeen
Department for Work and Pensions Proposes Sweeping Welfare Reforms to Incentivize Long-Term Unemployed Back into Work
Competition and Markets Authority Launches Formal Investigation into Artificial Intelligence Partnerships Involving Major Tech Giants
United Kingdom Foreign Secretary David Lammy Concludes High-Level Strategic Talks in Washington on Middle East Security
National Health Service England Unveils Emergency Winter Resilience Plan to Combat Projected Surge in Emergency Admissions
Bank of England Governor Andrew Bailey Signals Cautious Approach to Interest Rate Cuts Amid Persistent Inflation
British Chancellor Rachel Reeves Finalizes Corporate Tax Overhaul Ahead of Autumn Budget to Fund Public Services
Automotive Manufacturers Urge Government Action as High Energy Costs and Global Supply Chain Disruptions Threaten Production
Metropolitan Police Issue Formal Apology Following Inadvertent Release of Confidential Information During High-Profile Investigation
Scottish Finance Secretary Shona Robison Unveils Devolved Budget Highlighting Housing and Public Service Adjustments
Energy Regulator Office of Gas and Electricity Markets Prepares to Remove Household Gas Standing Charges Following Treasury Mandate
Treasury Confirms Reversal of Planned Cash Individual Savings Account Allowance Reduction Protecting Twenty Thousand Pound Limit
Office for Budget Responsibility Revisions Predict Moderate United Kingdom Economic Growth with Elevated Inflation Pressures
×