The UK borrowing will reach £275 billion due to economic crisis
The UK is directing all efforts to resolve the economic crisis caused by the Covid-19 pandemic, and one of those involves raising cash by selling £275 billion, which is about $340 billion, of debts between the months of April and August.
This means that only in these five months the government aims to raise two times more funds than in the whole financial year of 2019. Fundraising measures, however, are deemed necessary, because of the large economic losses the country suffered as a result of the Covid-19 pandemic, estimated at £130 billion.
Apart from losses in funds, the economy also largely suffered from business interruptions and job cuts, which led to the deference of several taxes. The UK government had to give subsidies to over 9 million workers who lost their jobs or were forced to take unpaid vacations during the pandemic.
Bank of England is playing a big role in the UK’s efforts to sell debt. In March, the bank helped with fundraising and it is reported that it will be buying £100 billion of government bonds in 2020. The UK government is also hoping to boost the recovery of the country’s economy through the improvement of public sector institutions like hospitals and schools.