London Daily

Focus on the big picture.
Tuesday, Jun 02, 2026

UK government borrowing surges again as Covid cases soar

UK government borrowing surges again as Covid cases soar

Figure of £17.4bn for November is down on last year but more than forecast by economists

The UK government borrowed £17.4bn in November, outstripping economists’ predictions and suggesting debt could far overshoot officials’ forecasts if the Omicron coronavirus variant slows the economy as expected.

It was the highest November borrowing since comparable records began 30 years ago, barring last year. During the furlough scheme in 2020, the Treasury under Rishi Sunak set successive peacetime records for monthly borrowing as it covered the costs of 80% of salaries for millions of people as well as support schemes for businesses.

Significant borrowing has continued in 2021, with £136bn borrowed between April and November, with the vaccine and test-and-trace programmes adding to costs, according to data published by the Office for National Statistics (ONS). That was the second highest since records began in 1993.


The November borrowing was higher than the £16bn a poll of economists by Reuters predicted.

The government spent £32bn during November, £2bn more than it did a year before, thanks in part to spending on the vaccine programme and test and trace. Those costs are likely to rise in the coming months after the government raced to accelerate the uptake of booster jabs to try to reduce the number of hospitalisations in the Omicron wave.

Rising inflation also drove higher debt interest costs of £4.6bn. Higher inflation raises borrowing costs because the government issues some of its debt via inflation-linked bonds, the returns of which follow the retail price index (RPI) measure. Annual RPI inflation – acknowledged by authorities to be a flawed measure – hit 7.1% in November, far above the 5.1% rate of consumer price index inflation.

Government borrowing is likely to come under further scrutiny in the coming months from within the Conservative party. Public sector net debt – the amount borrowed over the years – was £2.3tn at the end of November, or 96.1% of GDP. That was the highest debt-to-GDP ratio since March 1963, when it was 98.3%.

Sunak and the Treasury are thought to have pushed back against proposals for more coronavirus restrictions partly because of the cost to the government of reintroducing financial support for businesses that would be forced to close, and officials have previously briefed about the costs of regular booster jabs.

Yet businesses have argued that they are suffering from a quasi-lockdown anyway, with customers deserting crowded spaces in order to avoid catching coronavirus before Christmas. Sunak on Wednesday revealed an extra £1bn in spending to help affected businesses.

In his budget in October, Sunak said he wanted to cut borrowing from 7.9% of GDP in the current financial year, which ends in April, to 3.3% next year.

However, the arrival of the Omicron variant is likely to slow GDP growth and to lower tax receipts, as people spend much less in pubs and restaurants. That will mean that official forecasts by the Office for Budget Responsibility are likely to have underestimated the amount the government will need to borrow to cover spending in the coming year.

Bethany Beckett, a UK economist at Capital Economics, said: “These data predate the recent surge in coronavirus infections caused by the Omicron variant, with a near-term tightening of virus restrictions once again a possibility. Although the economy has got better at coping with restrictions with each new wave, we still suspect it would prompt a deterioration in the public finances via lower tax revenues and the potential reintroduction of government support schemes.”

The ONS has revised down borrowing over the financial year so far by £9bn, but Samuel Tombs, chief UK economist at Pantheon Macroeconomics, a consultancy, said it was “likely to overshoot the OBR’s forecast” of £183bn.

The drop in borrowing between November 2020 and November 2021 was the smallest so far this fiscal year, despite the absence of the furlough scheme, Tombs said. He also pointed out that tax receipts rose more slowly than anticipated by the forecaster, and that “the trend in public borrowing is about to deteriorate markedly” with slower economic growth likely.

Newsletter

Related Articles

0:00
0:00
Close
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
Global Critical Mineral Alliances Expand as Western Nations Move to Counter Chinese Supply Dominance
United States Imposes Fifty Percent Tariffs on Mexican Steel and Aluminum Ahead of Trade Pact Review
European Union and China Head Toward Major Trade Conflict Over Clean Technology Exports
United States Economic Growth Severely Downgraded to One Point Six Percent as Stagflation Fears Mount
World Health Organization Warns Central African Ebola Epidemic is Outpacing Containment Efforts
United States Treasury Department Conditions Sanctions Relief on Reopening of the Strait of Hormuz
Iranian Air Defenses Intercept and Destroy United States Military Drone Over Bushehr Province
Iranian Armed Forces Launch Ballistic Missiles Toward Unspecified Targets Prompting Regional Condemnation
United Nations Secretary-General Warns Global Order Facing Highest Level of Conflict Since 1945
Israel Issues Sweeping Evacuation Orders in Southern Lebanon Amid Intensified Hezbollah Conflict
Russia Announces Systemic Military Strikes Targeting Ukrainian Defense and Energy Infrastructure
United States and Iranian Negotiators Reach Draft Agreement to Extend Ceasefire and Resume Nuclear Talks
United Nations Security Council Deeply Divided Over United States Capture of Venezuelan President
US and Iran Exchange Direct Military Strikes Amid Fragile Gulf Ceasefire
World Health Organization Warns of Catastrophic Ebola Outbreak in DR Congo
Russia Threatens New Wave of Strikes on Ukrainian Infrastructure and Embassies
Scientists Warn Atlantic Ocean Currents Could Collapse Faster Than Projected
Anthropic Reaches $900 Billion Valuation in Historic AI Funding Round
Washington Imposes Crippling Sanctions on Iranian Maritime Authority
Japan and the Philippines Initiate Strategic Intelligence-Sharing Pact
Microsoft Deploys Autonomous Computer-Using AI Agents to Global Markets
Anthropic Secures $45 Billion Compute Infrastructure Agreement With SpaceX
U.S. Director of National Intelligence Resigns Amid Administration Shakeup
Micron Technology Crosses Trillion-Dollar Valuation Amid Unprecedented Hardware Demand
Canada and Germany Finalize Historic Long-Term LNG Export Agreement
China Expands International Travel Restrictions on Domestic AI Researchers
Japan Approves Sweeping Overhaul of National Intelligence Apparatus
Global Airlines Scramble Logistics as Middle East Airspace Remains Fractured
Japan's Naphtha Imports Plunge 47 Percent Amid Strait of Hormuz Closure
Global Crude Prices Retreat Below $96 as Gulf Tensions Momentarily Ease
Generative AI Outperforms Human Baselines in Landmark Global Creativity Study
NASA Partners With Private Aerospace to Unveil Permanent Lunar Base Architecture
South Korean Equity Markets Surge on Next-Generation Memory Chip Frenzy
×