Britain’s budget deficit has risen to the highest mark during the COVID-19 pandemic since the 1946, with the number reaching 303.1 billion pounds in the financial year to end-March.
Figures published by the Office for National Statistics on Friday showed the budget deficit was equivalent to 14.5% of the country’s annual gross domestic product (GDP), compared to 15.2% of GDP in the year after end of World War II.
In the coronavirus pandemic, the government support for individuals and businesses contributed to an increase of £203.2 billion (or 27.5%) in central government day-to-day (or current) spending. Central government tax and National Insurance receipts (combined) in the financial year ending March 2021 fell by £34.9 billion (or 5.0%) compared with the same period a year earlier. The staggering budget deficit came as a result of these low receipts and high expenditure, just as Britain is set to take another gradual step in the lifting of restrictions.
After the reopening of non-essential retail and some parts of the leisure and hospitality sector in April, further reopening is scheduled each month until June. Investment bank J.P Morgan said in a report they were looking for back-to-back GDP gains in the middle two quarters of 2021 of close to 5%.
A London top financial analyst has suggested as the UK is slowing reopening its economy, “we are anticipating some strong economic numbers for the next few months, with positive GDP numbers and unemployment showing signs of improvement.
The remaining steps of easing the lockdown will take place no earlier than 17 May (step 3) and no earlier than 21 June (step 4), according to the government’s roadmap.
The third step is set to see most social contact rules outdoors lifted, indoor hospitality reopen, larger indoor performances and sporting events take place among other measures.
The Windsor Castle pub is pictured in central London, on March 16, 2011
Step four plans to see all legal limits on social contact removed, nightclubs reopened and remaining restrictions on large events and performances lifted.
Central bank has already stated that they have enough capacity to support the economy further if need may be, explained the City financial analyst.
The coronavirus pandemic has crushed some of the biggest UK retail giants, with the likes of the Arcadia Group and Debenhams going bust and dozens of others announcing cuts and store closures around the country.
Debenhams retail store.
Coupled with Britain’s withdrawal from the European Union, the pandemic has largely brought an overhaul of the UK economic outlook, with the City of London financial hub suffering the exodus of financial companies to Europe.
Sourse: sputniknews.com
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