The Government borrowed £35.9 billion in August, the third highest total on record for a single month, official figures revealed today.
Last month’s yawning deficit — equivalent to £537 for every man, woman and child in the country — is well below the all-time highs seen in April and May but is more than six times bigger than the £5.4 billion borrowed in the same month last year.
Boris Johnson’s Government has already been loaned £173.7 billion in the first five months of the financial year, more than five times the total for the entire previous 12 months. Total outstanding public debt stood at £2.024 trillion.
The borrowing figure was inflated by the £500 million Eat Out to Help Out scheme during the month as millions of diners flocked to take advantage of the £10 discounts on meals. Other expensive emergency measures included the job retention furlough scheme, for which the bill was £6.1 billion and the Self Employment Income Support Scheme, which cost £4.7 billion.
Andrew Wishart, UK economist at City forecasters Capital Economics, said: “We think the resurgence of the virus and new restrictions will cause GDP to stagnate for the rest of this year, hurting tax revenues.
“Meanwhile, the Chancellor announced a further £24.3 billion of spending on public services yesterday. And the Government’s new Job Support Scheme and the extension of the VAT cut for hospitality and tourism may add up to £10 billion to the cost of direct support.
“The result could be that the Chancellor ends up borrowing a whopping £370 billion or 18.4 per cent of GDP in 2020-21, pushing up the debt to GDP ratio from 88.4 per cent in 2019/20 to 102 per cent in 2020-21.
“But with the recovery stuttering and no sign of concern in the gilt market, the Government is right to have refocussed on supporting the economy rather than raising taxes.”