London Daily

Focus on the big picture.
Saturday, Jun 20, 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
Long-Term Economic and Political Effects of Brexit Continue to Shape UK Policymaking
Digital Disinformation Emerges as a Growing National Security Challenge in the United Kingdom
Britain's Dependence on Global Energy Routes Drives Push for More Resilient Supply Chains
Rising Energy Costs Continue to Threaten Britain's Cost-of-Living Recovery
Concerns Grow Over Far-Right Organizing and AI-Driven Online Radicalization in Britain
UK-Led Global Partnerships Conference Calls for Reform of International Development Finance
Middle East Tensions Continue to Weigh on UK Business Confidence
Reports of Middle East Peace Deal Ease Pressure on UK Energy Prices
UK Warns Middle East Conflict Could Worsen Global Food Insecurity
UK Economy Loses Momentum After Strong Start to 2026
Bank of England Holds Interest Rates at 3.75% Despite Easing Inflation
Brexit's Legacy Remains Deeply Divisive Ten Years After the UK Voted to Leave the European Union
International Anti-War Conference Opens in London as Debate Over European Rearmament Intensifies
UK Health Authorities Introduce Drug Price Concessions Amid Record NHS Medicine Shortages
Sir David Attenborough Supports Sherwood Forest Conservation Efforts After Loss of Major Oak
Aardman Animations Marks 50 Years With Major Exhibition in Bristol
Drax Cleared After Investigation Into Wood Pellet Sourcing Practices
Jaguar Land Rover Shifts Toward Hybrid Vehicle Production for US Export Strategy
UK Police Arrest Liberal Democrat MP Cameron Thomas on Suspicion of Assault
Health Concerns Grow Over Elevated Kidney Cancer Rates Near Lancashire PFAS Factory
Royal Navy F-35 Jets Conduct First NATO Air Warfare Exercise from Finnish Airspace
UK NHS Issues Price Concessions for Medicines Amid Severe Drug Shortages
Heathrow Third Runway Project Faces Sharp Downward Revision in Expected Economic Benefits
Amber Heat Warning Issued Across Parts of England and Wales as Temperatures Rise
Train Collision Near Bedford Disrupts UK Rail Network and Leaves Multiple Injured
Bank of England Data Suggests Brexit Has Reduced UK Economic Output by Around Six Percent
UK Borrowing Costs Hold Near 4.8 Percent as Political Uncertainty Fuels Market Pressure
Andy Burnham Emerges as Front-Runner to Succeed Keir Starmer After Landslide Makerfield Victory
Prime Minister Keir Starmer Faces Mounting Pressure to Resign After Labour By-Election Defeat in Makerfield
Payment Fraud Losses Reach £1.28 Billion and Raise National Security Concerns
Lending to Small Businesses Climbs to Highest Level Since Late 2024
Middle East Conflict Clouds UK Economic Recovery Despite Strong First-Quarter Growth
Bank of England Moves to Simplify Capital Rules for Smaller Lenders
UK Government Fast-Tracks National Security and Cyber Resilience Legislation
Ofcom Investigates Telegram Over Alleged Role in Organising Arson Attacks
MPs Press Fujitsu to Speed Compensation for Post Office Horizon Victims
Bank of England Delays Final Basel III Implementation Changes to Support UK Banking Competitiveness
Pound Falls as Political Uncertainty and Bank of England Signals Weigh on Markets
0Andy Burnham Wins Makerfield By-Election and Emerges as Main Challenger to Keir Starmer
Dorset Council Tests AI Tools to Streamline Local Planning Applications
UK Researchers at Kew Gardens Use AI to Speed Up Identification of Threatened Plant Species
UK Gilt Yields Ease Toward 4.8% as Inflation and Labour Market Data Weigh on Bonds
Bank of England Data Shows Resilient SME Lending Despite Economic Slowdown
UK Finance Reports Weakening Services Activity as Business Confidence Softens
UK Introduces Mandatory Internal Complaints Process Under Data Use and Access Act
Bank of England Governor Andrew Bailey Flags Geopolitical Uncertainty as Key Risk to Inflation Outlook
Bank of England Holds Interest Rates at 3.75% as Policymakers Signal Cautious Stance on Inflation Risks
Cornwall Clergy Raise £40,000 for Church Repairs Through Everest-Themed Charity Challenge
UK Business and Social Landscape Reflects Strain From Geopolitical and Domestic Pressures
Tensions Grow in UK Over Sikh Kirpan and Religious Symbolism in Public Debate
×