London Daily

Focus on the big picture.
Saturday, Feb 07, 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
The Implications of Expanding Voting Rights to Non-EU Foreign Residents in France
Ghislaine Maxwell to Testify Before US Congress on February 9
Al.com Acquired by Crypto.com Founder for $70 Million
Apple iPhone Lockdown Mode blocks FBI data access in journalist device seizure
Belgium: Man Charged with Rape After Faking Payment to Sex Worker
KPMG Urges Auditor to Relay AI Cost Savings
US and Iran to Begin Nuclear Talks in Oman
Winklevoss-Led Gemini to Slash a Quarter of Jobs and Exit European and Australian Markets
Canada Opens First Consulate in Greenland Amid Rising Geopolitical Tensions
China unveils plans for a 'Death Star' capable of launching missile strikes from space
NASA allows astronauts to take smartphones on upcoming missions to capture special moments.
Trump administration to launch TrumpRx.gov for direct drug purchases
Investigation Launched at Winter Olympics Over Ski Jumpers Injecting Hyaluronic Acid
U.S. State Department Issues Urgent Travel Warning for Citizens to Leave Iran Immediately
Wall Street Erases All Gains of 2026; Bitcoin Plummets 14% to $63,000
Epstein Case Documents Reignite Global Scrutiny of Political and Business Elites
Eighty-one-year-old man in the United States fatally shoots Uber driver after scam threat
UK Royal Family Faces Intensifying Strain as Epstein-Linked Revelations Rock the Institution
Political Censorship: French Prosecutors Raid Musk’s X Offices in Paris
AI Invented “Hot Springs” — Tourists Arrived and Were Shocked
Tech Mega-Donors Power Trump-Aligned Fundraising Surge to $429 Million Ahead of 2026 Midterms
UK Pharma Watchdog Rules Sanofi Breached Industry Code With RSV Vaccine Claims Against Pfizer
Melania Documentary Opens Modestly in UK with Mixed Global Box Office Performance
Starmer Arrives in Shanghai to Promote British Trade and Investment
Harry Styles, Anthony Joshua and Premier League Stars Among UK’s Top Taxpayers
New Epstein Files Include Images of Former Prince Andrew Kneeling Over Unidentified Woman
Starmer Urges Former Prince Andrew to Testify Before US Congress About Epstein Ties
Starmer Extends Invitation to Japan’s Prime Minister After Strategic Tokyo Talks
Skupski and Harrison Clinch Australian Open Men’s Doubles Title in Melbourne
DOJ Unveils Millions of Epstein Files, Fueling Global Scrutiny of Elite Networks
France Begins Phasing Out Zoom and Microsoft Teams to Advance Digital Sovereignty
China Lifts Sanctions on British MPs and Peers After Starmer Xi Talks in Beijing
Trump Nominates Kevin Warsh as Fed Chair to Reorient U.S. Monetary Policy Toward Pro-Growth Interest Rates
AstraZeneca Announces £11bn China Investment After Scaling Back UK Expansion Plans
Starmer and Xi Forge Warming UK-China Ties in Beijing Amid Strategic Reset
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Markets Jolt as AI Spending, US Policy Shifts, and Global Security Moves Drive New Volatility
U.S. Signals Potential Decertification of Canadian Aircraft as Bilateral Tensions Escalate
Former South Korean First Lady Kim Keon Hee Sentenced to 20 Months for Bribery
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
China Executes 11 Members of the Ming Clan in Cross-Border Scam Case Linked to Myanmar’s Lawkai
Trump Administration Officials Held Talks With Group Advocating Alberta’s Independence
Starmer Signals UK Push for a More ‘Sophisticated’ Relationship With China in Talks With Xi
Shopping Chatbots Move From Advice to Checkout as Walmart Pushes Faster Than Amazon
Starmer Seeks Economic Gains From China Visit While Navigating US Diplomatic Sensitivities
Starmer Says China Visit Will Deliver Economic Benefits as He Prepares to Meet Xi Jinping
UK Prime Minister Starmer Arrives in China to Bolster Trade and Warn Firms of Strategic Opportunities
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Amazon to Cut 16,000 Corporate Jobs After Earlier 14,000 Reduction, Citing Streamlining and AI Investment
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
×